Budapest Business Journal 22/17

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Market overview:

Green offices

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GREEN BUSINESS ent is Protecting the environm it is nice idea, no longer just a survival. essential to business at how look In this section, we while businesses can grow le. staying sustainab

Report Hungary tilts against

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What could go wrong?

As the Russian−Ukraine conflict simmers on, and the government of Vladimir Putin engages with the EU in a war of sanctions, analysts weigh potential problems for Hungary – ranging from loss of the agriculture market to an exodus of investment. 3

NEWS

SPECIAL REPORT

SOCIALITE

Budapest mayor Wind turbines weather against 2024 Olypmics turbulent times

Café Budapest kicks off culture season

Asked by Ferenc Falus, his opponent in the October 12 election, whether he thought the capital was ready for the top world sporting event, Mayor István Tarlós said the idea is nice, but the timing is not yet right.

04

The annual orgy of theater, dance, music, exhibitions – even circus performances – starts the cultural season. Expect offbeat acts by locals and foreigners, such as musical genius Laurie Anderson.

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Hungarian policy has discouraged development of windmills, a potentially beneficial source of alternative energy. A shift in EU regulations may change the situation for the better.

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Budapest Business Journal | September 19 – October 02, 2014

BBJ

SPECIAL REPORT:

3Special Market overview

with company interviews

12-17

Report Hungary tilts against

windmills

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GREEN BUSINESS

GREEN BUSINESS is Protecting the environment nice idea, it is no longer just a survival. essential to business at how look In this section, we while businesses can grow staying sustainable.

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SEPTEMBER 19, 2014 – OCTOBER 02, 2014

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What could go wrong?

As the Russian−Ukraine conflict simmers on, and the government of Vladimir Putin engages with the EU in a war of sanctions, analysts weigh potential problems for Hungary – ranging from loss of the agriculture market to an exodus of investment. 3

NEWS

SPECIAL REPORT

SOCIALITE

Budapest mayor Wind turbines weather against 2024 Olypmics turbulent times

Cafe Budapest kicks off culture season

Asked by Ferenc Falus, his opponent in the October 12 election, whether he thought the capital was ready for the top world sporting event, Mayor István Tarlós said the idea is nice, but the timing is not yet right.

04

The annual orgy of theater, dance, music, exhibitions – even circus performances – starts the cultural season. Expect off−beat acts by locals and foreigners, such as musical genius Laurie Anderson.

28

Hungarian policy has discouraged development of windmills, a potentially beneficial source of alternative energy. A shift in EU regulations may change the situation for the better.

20

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THE EDITOR SAYS

Uncivil treatment of civil society In one of his last acts as European Commission President, Jose Manuel Barroso stopped by Budapest on September 11 to formally acknowledge Hungary will receive €34.5 billion in European Union funding for the period from 2014−2020. The country could use the money: With state−sponsored civil engineering forming the lion’s share of construction, EU funding is propping up Hungary’s building industry, and other sectors have received a needed boost from the government’s Széchenyi Plan for EU spending.

We might question some of the ideas for those funds – like the proposal to remake Budapest’s lovely City Park by covering areas that are currently green with large swaths of pavement. But that’s for another editorial.

The more pressing issue, one that has been raised by officials in Norway, The New York Times and a lot of Hungarian citizens, is whether the EU should have given Hungary funds without first forcing the government to make some concessions. Critics of the current government have asked, not unreasonably, why the EU does not hesitate to fund a leadership that calls itself “illiberal”. While that is an interesting argument, a more basic demand, and one that should not be up for debate, is that the government should end its campaign of harassment against NGOs receiving Norwegian funds.

Not attacking civil society is a pretty small concession, and one that the government should want to make.

Right now, instead of supporting NGOs, the government is working to shut some of them down. On September 8, police raided the offices of the Ökotárs Alapítvány, an environmental NGO that distributes the Norwegian grants, and another group called the Foundation for the Development of Democratic Rights.

Months ago, the Fidesz government made clear its objections to the Norway−funded NGOs: They back liberal causes. The latest call for proposals from the Norwegian NGO Fund seeks applications in seven

areas: democracy and human rights, gender and equal opportunities, community and organizational development, youth and children’s issues, environment and sustainable development, provision of welfare and basic services, and empowerment of vulnerable groups, including Roma. You can call these goals liberal, and you can also point out that some people who are politically active in the liberal opposition work with some of these NGOs. But that is no reason to crush these groups. The government is now accusing the two NGOs it raided on September 8 with financial misdealing, the latest of a series of unproven charges that have been made over the past few months. If these groups were really doing anything wrong, it would surely have been found out long ago.

While they may be considered mildly political, for the most part these NGOs are seeking goals that a large majority of society would consider helpful. They are part of the fragile network that makes up Hungary’s civil society, and they should be nurtured, not persecuted.

The Bertelsmann Foundation’s Social Justice Index, released September 15, listed Hungary as being near the bottom – 25th among the 28 EU members – in an index combining measures of poverty prevention, equitable education, labor market inclusion, social cohesion and non−discrimination, health and intergenerational justice. Many of these areas are addressed by the Norway funded NGOs, and they represent relatively apolitical social goods.

During a September 14 protest in the center of Budapest to oppose the raids on the two NGOs, speaker Márton Gulyás of the Humán Platform noted that probably fewer than 1,000 demonstrators had been sufficiently outraged to show up on a cloudy Sunday. He maintained that the real enemy was not the country’s leadership, but rather apathy. While he may have a point, NGO activists in every country have to fight against apathy. They should not also have to contend with a hostile government.

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In 1948, three years after the siege of Budapest, the Buda Castle was still in ruins. The post−war reconstruction of the castle would not be completed until 1966. Today, with the newly rebuilt Várkert Bazár – the stairs and fancy construction in the front of the castle – the former home of royalty is now a major tourist attraction.

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Quest for EU farm aid

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Concerns about Ukraine conflict As fighting simmers to the east, frightening investors and putting sanctions in the way of trade, we ask analysts what it all means for business in Hungary.

is already a state−owned gas trading company, as MVM acquired E.ON Földgáz Trade Zrt. last year. The new MFB Földgázkereskedő Zrt, a fully owned subsidiary of the Hungarian Development Bank (MFB), will finance the purchase of commercial natural gas to increase the available stocks. The company will start its operation with HUF 100 mln in initial capital. The government said that the quantity of natural gas currently in storage is already greater than one and a half times the total residential consumption measured over the last winter.

GABRIELLA LOVAS

The fighting is in Ukraine, but analysts note that the economic fallout caused by unrest and sanctions among our eastern neighbors could impact Hungary in a variety of ways.

The biggest concerns seem to focus on interference with the country’s business with Russia.

In response to the ongoing conflict in Ukraine, the European Union implemented restrictive measures against Russia on July 31. These included restricted access to EU capital markets, an embargo on the export and import of arms and the exports of dual use goods and certain energy related equipment and technology to Russia. On August 8, 2014, Russia struck back, with an import ban on certain meat, dairy, fruit, vegetable and processed food products from the EU, USA, Canada, Australia and Norway.

Then the EU decided to adopt further economic sanctions against Russia, which apply since September 12. However, based on the implementation of the peace plan in Ukraine, sanctions could be amended or suspended.

Although the conflict is expected to somewhat slow down Hungary’s growth in the second half of the year, the government expects an overall 3.1% growth rate this year and 2.5% next. Analysts asked by the Budapest Business Journal agree that the Russian embargo will have a marginal effect on Hungary’s GDP in 2014 and will shave less than 1% off Hungary’s economic growth in 2015. Their GDP forecast is 3.1−3.2% and 2.1−2.5% for this year and the next, respectively.

POTENTIAL LOSS FOR FARMERS “There is a chance that we lose Russia’s agricultural market forever, as Moscow is actively seeking alternative suppliers,” K &H analyst Dávid Németh told the BBJ. This may reduce the demand for labor in Hungar y ’s agricultural sector. The oversupply of agricultural products

K&H analyst Dávid Németh.

There is a chance that we lose Russia’s agricultural market forever, as Moscow is actively seeking alternative suppliers. in the EU will push down food prices, which may result in lower inf lation. European Commission (EC) figures show that Hungar y ’s overall agricultural expor t to Russia reached €266 million in 2013, within that now banned products were wor th €77 mln.

Looking to save the day, Hungarian Minister of Agriculture Sándor Fazekas met his Russian counterpart Nikolay Fyodorov on September 8 in Moscow.

The two ministers agreed that a policy of sanctions does not provide a solution to the conflict in Ukraine and that the crisis must be solved through negotiation. “The two countries have a common interest in maintaining bilateral agricultural relations in animal husbandry, horticulture, the

Equilor’s Ákos Kuti.

seed sector, agro−tourism, animal health, technological transfer, higher education and training, and in increasing exports,” according to a government statement.

The EC has tried to address market oversupply problems by introducing short−term market support measures worth more than €155 mln in August for fruit and vegetables and dairy products. An additional €30 mln will also be available to enhance promotion programs on EU and third country markets starting in 2015.

WINTER IS COMING‥ With cold weather on the way, there is concern about energy prices and the possibility that gas supplies from the east stop. Russia has already halted gas flows to Ukraine, a major transit route for the EU, more than once before. If the gas transit is cut off at all, it would probably happen in January, because that would hurt sooner, said Németh. That would lead to the introduction of limits for industrial users and a return to coal power plants.

Hungary relies heavily on Russia for natural gas with a large share of that coming from Ukraine. Hungary has filled its storage to 56% of capacity compared to the average 88% level of the EU member states. This seems low at first sight, but the level of gas storage was only 33−34% in the spring, says Equilor chief analyst Ákos Kuti, adding that this should be enough for the winter.

The government recently announced that it has established a new a gas trading company in order to ensure the security of residential gas supply in Hungary, although there

CAPITAL MARKETS Hungary’s capital market wavers a bit after every “round” of the conflict, share prices drop a bit and the forint weakens slightly, but these are minor and temporary changes, Concorde analyst János Samu told the BBJ. He does not see significant deterioration in government bond yields either. It seems that capital market players have learnt to live with this problem.

Among the four blue chips, Magyar Telekom is relatively unaffected by the conflict, according to Equilor.

The significant increase in the stock ’s value during the past two months signals that investors went overweight on the telco’s stocks.

In turn, OTP could see a combined HUF 1,700 per share loss in the, admittedly very unlikely, worst case scenario, said Kuti, partly because OTP Ukraine is the group’s third biggest member. The loan stock of the bank’s Ukrainian and Russian subsidiaries reaches HUF 600 billion and HUF 874 bln, respectively, which is 13% of the group’s total loan stock. The non− performing ratios of the two banks are high, at a respective 36.4% and 16.6%.

Although the sanctions do not yet cover pharmaceuticals, Richter is at risk, as 30% of its revenues come from Ukraine and Russia. Richter CEO Erik Bogsch said earlier that a 1% devaluation of the ruble could reduce profits by approximately HUF 550 mln and could also hurt gross margin.

In the worst case scenario, and this means the takeover of Western companies, Richter’s Russian facility, which was set up with an investment of $18 mln in 2001, would be in danger.

As for MOL, the Russian market accounts for only 7% of the group’s upstream production and 3−5% of EBITDA due to the recent sales of Russian assets. The main risks include an unfavorable change in acreage rents or other taxes and a distribution channel cut−off.

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Budapest Business Journal | September 19 – October 02, 2014

NEWS

IN BRIEF HUNGARY ASKS EU TO RECONSIDER AID FOR FARMERS Hungary has asked the European Union to put fruit and vegetable subsidies on the agenda of the Special Committee on Agriculture. Hungary’s request follows the European Commission’s decision to suspend aid to farmers affected by the Russian ban on EU agricultural products.

The EU agriculture committee should discuss the issue without delay, Hungary’s agriculture and regional development office (MVH) said in a statement. EC commissioner for agriculture and rural development Dacian Ciolos announced on September 10 that aid to EU farmers would be suspended. Member states’ applications for subsidies were several times higher than the total EU average annual exports to Russia, the commissioner argued.

Hungary had already indicated earlier on that more than €125 mln would be necessary to compensate Hungarian farmers. There were only 226 applicants from Hungary and the amount of subsidy requested was low, MVH said.

CONSUMERS OWE LESS TO ENERGY SERVICE PROVIDERS Consumers in Hungary owed HUF 96.3 bln to energy service providers in June, compared to HUF 124 bln a year earlier, business daily Vilaggázdaság reported on September 11. According to the National Development Ministry, currently about 2.3 million consumers are late with the payment of their bills to utility companies.

In June, customers were late over 30 days with the payment of HUF 21.6 bln while bills overdue for more than 361 days totaled HUF 43.9 bln. Consumers owe HUF 42.4 bln to gas service providers, HUF 35.3 bln to electricity companies and HUF 18.5 bln to district heating companies. The amounts owed by consumers for utility bills have dropped, due to state−mandated price cuts.

MNB: BANKING SECTOR FORINT LIQUIDITY GROWS IN AUGUST Forint liquidity of Hungary’s banking sector rose in July from a month earlier, evidenced in an increase in the average stock of lenders’ overnight deposits, the National Bank of Hungary said in a report that it released on September 12. The average stock of O/N deposits rose by HUF 226.5bn to HUF 276.2bn in August from a month earlier. The statistical balance sheet of the MNB also shows that average deposits of the central government fell by HUF 411.8bn to HUF 1,755.2bn in August. The central bank said the drop reflected the maturing of a HUF 310bn FX bond on July 28 and a HUF 340bn forint bond on August 22. The MNB noted that its two−week bill, earlier its main sterilisation instrument, had been replaced by the two−week central bank deposit on August 6.

RUSSIAN REGION OF YUGRA PROMOTES BUSINESS TIES The government of Hungary is working to strengthen its business cooperation with the Russian region of Yugra, the Russian press said on September 16. Hungarian Council General Sándor Molnár met with Natalia Komarova, the governor of Yugra, in the city of Yekaterinburg, where the two discussed economic cooperation, the reports said. The two sides agreed on strengthening cooperation in the tourism and agro−industrial sectors, as well as organizing a visit by Russian regional entrepreneurs to Hungaryin 2015, with the goal of developing innovative technologies. The Yugra governor also invited Hungarian partners to participate in international projects and economic forums that will take place in the region.

Molnár reaffirmed Hungary’s interest in strengthening business ties with Russia, despite the deteriorating relations between Russia and the EU. “We hope that Russian sanctions won’t affect the cooperation between two countries”, the council was quoted as saying by Russian media. Hungary and Yurga had already established cooperation in the sphere of science and education in previous years.

Foreign trade turnover between Yugra and Hungary is said to amount to $24 bln.

HUNGARIAN NATIONAL TRADE HOUSE TO OPEN UNIT IN RIO State−owned Hungarian National Trade House Company (MNKH) is about to open its first unit in the Americas, Hungarian business daily Napi Gazdaság reported on September 16. The new branch will open in Rio de Janeiro (Brazil) in a few days, CEO György Kerekes said to the newspaper.

A second unit will open in Mexico at the end of the year and a third one in Chile in 2015. MNKH was set up by the state to find new markets for Hungarian companies in Asia and in the former Soviet Empire, as part of the government’s Eastern−facing strategy. It has established trade houses in Astana, Baku, Moscow, Beijing and Abu Dhabi. After targeting developing countries, MNKH will now focus on the United States, Canada, Japan and Korea, CEO Kerekes said.

MINISTER EXPLAINS HUF 212 BLN IN LOANS TO MVM In response to a query by an opposition MP posted on the Parliament website, National Development Minister Miklós Seszták explained the reasons for a total of HUF 212 bln in loans that the Hungarian National Asset Management Company (MNV) has extended to one of its assets, the Hungarian Electricity Works (MVM), Hungarian news agency MTI reported on September 12. Seszták wrote to Socialist MP Bertalan Tóth that: (1) MNV lent MVM HUF 71 bln for the purchase of E.ON’s gas business in Hungary in August 2013.

In the interest of ensuring repayment, a capital raise of an equal amount was made in MVM, (2) MNV lent MVM another HUF 41 bln to buy a 49.73% stake in gas distributor Főgáz, and (3) the third loan, of HUF 100 bln, was used to top up MVM’s gas reserves.

NORWAY CRITICIZES RAIDS ON NGOS Norway strongly criticized Hungary today, saying the country is distancing itself from European democratic norms. Yesterday the Hungarian police raided the offices of civic groups critical of the government, Associated Press reported on September 9. Norway spoke up after the Hungarian police raided the offices of two NGOs who receive financial aid under the Norway Grants program and distribute it to to other civic associations. The Norway Grants provides funds for social, educational or environmental projects in Hungary and in 15 other European countries. Norway’s minister for European affairs Vidar Helgesen said the raids carried out were “unacceptable” and represented the “harassment of civil society organizations.” The Hungarian government says some of the NGOs are misusing the money and spending it on anti− government activities. One of the groups has admitted organizing anti−government protests with the help of the Norway grant but the government specifically complained about democracy watchdog organizations, such as the Hungarian Civil Liberties Union (HCLU), corruption watchdog Transparency International Hungary and Átlátszó (Transparent), a group of investigative journalists. The HCLU said the raids came after investigations earlier this year by the government’s contro office (KEHI) failed to find evidence of any wrongdoing. HCLU sid the raids were “politically motivated actions that elevate the illiberal Orbán government’s attack against civil society to a new, unprecedented level.” The government’s aim is “clearly to intimidate civil society and silence critical voices”. Norway rejects Hungary’s claim that it has the authority to audit the funds. On May 9 Oslo suspended payments, not to the small civic groups now in question, but to another aid program managed by the Hungarian state.

The Norwegian authorities said that program will only start to be funded again when NGOs stop being harrassed. Hungary said that it would ask the mediation of the EU to settle the conflict.

BILL WOULD RAISE TAX REBATE FOR FILMMAKING A bill submitted to Parliament on September 12 by the head of the Prime Minister’s Office would raise Hungary’s tax rebate for film production from 20% to 25%. The rebate would apply, “with some exceptions”, to applications submitted after June 25, 2014, according to the text of the bill published on the website of Parliament.

GOVERNMENT TO DOUBLE FAMILY TAX ALLOWANCE Parents raising two children will see their family tax allowance double in 2015, National Economy Minister Mihály Varga said in an interview to Hungarian daily Magyar Nemzet on September 14.

Family tax rebates were introduced by the Fidesz right−wing government after it won the 2010 parliamentary elections.

About 300,000 parents will benefit from the government’s latest plans. The total revenue of families with two children will increase by HUF 55 to 61 bln a year, the minister added. The tax−relief measure would only apply to families who pay taxes, he said.

TARLÓS: OLYMPICS NOT A REALISTIC IDEA Budapest will not be an Olympic city. At least not for the time being. The idea of the Hungarian capital hosting the 2024 games is “unrealistic”, the Budapest mayor said on September 15. Although the Olympic Games would have a considerable impact on tourism and sport in Budapest, this is not the right time to raise the issue, he added.

István Tarlós is running again for mayor in Hungarian local elections on October 12.

His main contender, opposition center−left candidate Ferenc Falus, has publicly asked Tarlós whether he thought hosting the Olympic games was a realistic idea. The Hungarian Olympic Committee (MOB) supported the idea of Budapest submitting a bid to host the Olympic Summer Games in 2024. MOB president Pál Schmitt said that the Hungarian capital would be ready to host the Olympics in 2024.

ROGÁN: BANKS MUST SETTLE BY END OF FEBRUARY 2015 Banks in Hungary must settle with borrowers by the end of February in the case of contracts that the courts have deemed unfair, Fidesz’s group leader said. Repayments on forex loans are expected to drop by 25−30%, the ruling party’s Antal Rogán told a news conference on September 15. As part of the forex loan compensation law, a moratorium on raising rates or fees will be introduced until April 30, 2016, he said. Rogán said the bill would be submitted to parliament on September 19 and the vote held on September 24. The 400 lenders affected will have to calculate the compensation for all foreign currency and forint loans taken out by some 1.3 million households. This will involve around 680,000 FX loan contracts and 650,000 forint ones, he added. The refunds will fi rst be calculated for forex loans, he said, with various deadlines set for the settlement before the end of February. According to a central bank estimate, the compensation will cost banks a combined €3 bln. The central bank will determine the formula to be used by banks for the calculation of refunds, Rogán said.

THREE HUNGARIAN INSTITUTES ABROAD TO OPEN IN 2015 Three new Hungarian institutes, which promote country abroad, are scheduled to open next year, a government official said. Mónika Balatoni, state secretary for cultural diplomacy, told MTI that plans were to open new facilities in Baku, Cluj (Kolozsvár) and Ljubljana. The new locations make sense in terms of Hungary’ policy of opening up to the east and boosting its regional role in central and southeastern Europe, she said. Most recently the country opened institutes in Beijing, Belgrade, Zagreb and Istanbul, she added.

BARROSO PRESENTS ORBÁN WITH FUNDING AGREEMENT FOR 2014-2020 European Commission President Jose Manuel Barroso presented Hungarian Prime Minister Viktor Orbán with an agreement on EU funding for Hungary in Budapest on September 11. EU funding is granted for a seven−year period and the agreement covers the 2014−2020 term.

Hungary will receive up to €34.5 bln during those seven years. At the ceremony in Thursday, Hungarian Prime minister Viktor Orbán noted that 60% of those EU funds would go toward economic development. The agreement “fully serves Hungary’s interests”, he said. Hungary is a net beneficiary of EU funds. The “Partnership agreement” between Hungary and the European Commission sets down the strategy for the optimal use of European Structural and

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Budapest Business Journal | September 19 – October 02, 2014

Investment Funds throughout the country. Out of the €34.5 bln granted for the next seven years, €21.9 bln will come from European structural cohesion funds while another €3.45 bln will be chanelled into rural development.

Hungary will also receive €39 mln to renew its fish farming infrastructure and develop it into a more environmentally−friendly sector. “The EU investments will help tackle unemployment and boost competitiveness and economic growth through support to innovation, training and education in cities, towns and rural areas.

They will also promote entrepreneurship, fight social exclusion and help to develop an environmentally friendly and a resource− efficient economy,” the European commission said when endorsing the agreement late August.

SATIRICAL PARTY FINALLY LEGITIMATE The court registered the satirical Two− Tailed Dog Party (MKKP) shortly before the deadline to register candidates in the local elections, the party announced on September 8, index.hu reports. The case does not present Hungarian democracy in a sunny light, party president Gergely Kovács said. More jokingly, he remarked that the registration had com at a lucky time, as “we still have 16 minutes to collect signatures”. The party, called Kétfarkú Kutya Párt in Hungarian, was started by an ironic graffiti artist and has promoted blatant lying and free beer, as well as other silly platforms. The Capital Court had earlier rejected the party’s request to be officially registered, on the basis that neither the name nor the goals of the party were serious. The MKKP appealed against this ruling but the court rejected it again, insisting that the name of the party is harmful to morality and has dishonourable associations. The Kúria overruled these decisions a day later.

MACRO Speaking X of figures The Budapest Business Journal presents some of the most important macro data of the past fortnight.

17.5% Growth in the output of Hungary’s construction sector, year−on−year in July, according to a September 15 report by the Central Statistics Office.

STATE MAY CONTROL ALCOHOL SALES

HUF 245 Amount of forints it took to purchase

Following the Hungarian government’s introduction of national tobacco stores, Parliament is now planning to introduce national beverage stores, reducing the number of places where alcohol can be purchased and controlling those sales, Hungarian online daily napi. hu reported on September 4 citing rumors. Adding confirmation, hvg.hu reported on September 12 that the system of distribution for alcohol would be similar to the national tobacco stores: The sales of spirits would be centrally controlled and sold only in stores licensed by the government. Beer and wine could still be sold more widely, according to reports. For catering facilities, retailing of alcoholic beverages will be permitted only where hot dishes are served.

Industry consultations with the government have already started, according to anonymous market players quoted by hvg.hu. National tobacco stores might win the concessions to sell alcohol, the news site noted. The decision is expected to increase the volume of black imports of alcohol, analysts said.

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a dollar on September 9. This was the forint’s worst performance against the dollar in two−and−a−half years, though the currency has recovered some since.

8,142 Number of candidates filing to run in October 12 elections in Hungary, where there are 3,177 towns and cities. According to nol.hu, 79% of the candidates are running as independents.

Source: KSH, MTI

STRICTER PUNISHMENT FOR STUDENT ASSAULTS Punishment for sexual assault committed at a school or university would be strengthened, under a proposal by Human Resources Minister Zoltán Balog, the official website of the Hungarian government kormany.hu reported on September 10. Speaking on the sidelines of a Higher Education Roundtable, Balog said that such crimes should be punishable by 2−8 years in prison rather than by 1−5 years in the basic case of assault. The stricter punishment regime should also apply to such assaults taking place during functions organized by institutions beyond the campus, too, he said. Referring to incidents at university camps that have recently come to light, Balog said a question mark hung over whether such crimes had been appropriately handled.

News 05

BBJ

2Business Audi produces 100,000th car in Győr Production volume at German carmaker Audi’s new plant at its base in Győr has passed Audi the 100,000 mark, Hungária Motors announced on September 14. Production at the new plant was launched a year ago in June. The automaker added a third shift at the plant in the summer. Audi Hungária employs more than 3,000 vehicle-assembly workers, and had revenue of €5.59 bln in 2013, up 5.8% year-on-year.

COMPANY NEWS

AVALON OPENS FOUR CARSHARING POINTS IN BUDAPEST Hungary’s market leading carsharing company Avalon is opening four new carsharing points in the country’s capital, the company announced on September 16. Avalon is now operating five sharing points. Avalon’s scheme, entitled CareSharing, provides an innovative solution for the environmental and traffic issues encountered in large European cities. Clients can pick up a car from any of the five sharing points and return the car, when they do not need it anymore. The service has daily, monthly and also annually fee options for both private (Avalon Publicare) and corporate (CarSharing) customers. Typical fees can work out cheaper than a rental. For example, according to their website, once you pay a HUF 10,000 registration fee and a monthly fee of HUF 1,300, using a car costs HUF 170 for an hour. In the long run, Avalon is planning to enter the Budapest Stock Exchange in 2018. The car sharing service based in the concept of hiring cars was launched in 1999 by two friends. Today, the service coordinates more than a hundred car hires a month.

GOVERNMENT SIGNS STRATEGIC PACT WITH TAKATA The Hungarian government has signed a strategic cooperation agreement with Japanese automotive industry supplier Takata in Budapest, Hungarian news agency

MTI reported. State secretary Péter Szijjártó said the agreement is in line with Hungary’s intentions to become a production center in Europe, and a center for R&D, as well.

He added that Takata is planning to spend 4.5% of its revenue on R&D this year. Takata chairman Stefan Stocker called the agreement “a milestone” and said it paved the way for further cooperation between the company and the country in the field of R&D. Takata launched construction of a €68 mln airbag and car safety systems plant in Miskolc in the spring. The plant will employ 1,000 people.

HYD PHARMA TO TEST A NEW CANCER DRUG Hungarian pharmaceutical company HYD Pharma has completed a HUF 250 mln research phase in the development of a new drug for cancer patients, Hungarian news agency MTI reported on September 15. The company’s research and development unit has succeeded in producing a drug which contains deuterium−depleted water, or DDW, which is known to mitigate the damaging effects of chemotherapy and radiation such as nausea, pain or hair loss. The company will now proceed with clinical tests, the costs of which could reach a nine−figure range, HYD Pharma’s CEO said. Venture capital fund manager Primus Capital recently invested HUF 400 mln in the pharmaceutical company.

HYD Pharma’s net revenue totalled HUF 693 mln in 2013.

SOLE-MIZO INVESTS HUF 1.8 BLN Hungarian dairy company Sole−Mizo is investing HUF 1.8 bln in its “túró” – a dairy product similar to cottage cheese – and yoghurt business, Sole−Mizo’s CEO István Herczeg announced on September 15 in Szeged. Production of túró will be boosted from a weekly 50−60 tons to 80−100 tons, he said. The company was awarded a HUF 845 mln European Union and state grant for the investment. The company’s sales exceeded HUF 42 bln last year. Approximately one− quarter of its sales revenue came from exports, mainly to Romania, the Arab states and Western Europe. Sole−Mizo is a unit of Bonafarm, an agrobusiness group owned by OTP Bank head Sándor Csányi.

SIÓ-ECKES EXPECTS 4-5% REVENUE INCREASE Hungarian juice maker Sió−Eckes expects a 4−5% revenue increase this year, sales director János Barna told MTI on Friday. Revenue has been around HUF 9 bln for years, Barna said.

This year, Sió−Eckes will process about 13,000 tons of fruit, turning out 10,000 tonnes of juice and puree, the company says. Most of the fruit the company processes is locally grown, with purchases from Hungarian farmers adding up to HUF 3−3.5 bln. In 2015, Sió−Eckes plans to spend HUF 500−600 mln on new packaging equipment.

WIZZ AIR EXPANDS IN ROMANIA Hungarian low−cost airline Wizz Air will add another Airbus A320 to operate its flights to and from Bucharest, Romania’s capital.

This will increase the carriers’ capacity by 29%, Wizzair announced on September 10.

The airline is expanding the number of its Romanian destinations. In July the company started to operate flights between Craiova and Barcelona, Bologna, Dortmund and Rome. In december 2014, new flights will start between the Romanian city of Iasi and Treviso (Italy),

and in the following spring, between Iasi and Milano, Bergamo and London. At the end of 2014, Wizz Air will fly from six destinations in Romania : Bucharest, Timisoara, Cluj−Napoca, Targu Mures, Craiova and Iasi. The company will maintain its fares at an affordable price for Romanian travelers, and hopes the increase in the number of destinations will boost tourism and employment in Romania.

LUFTHANSA: MORE PASSENGERS ARRIVE IN HUNGARY Passenger numbers on German airlines Lufthansa’s flights arriving to Hungary rose by 2% reaching 393,000 in the first half of the year as compared to the same period a year earlier, the German airline’s local head Gábor Antal announced at a press conference on September 9. Passenger numbers on Brussels Airlines flights were up 26%, while Austrian Airlines saw a 7% rise in the passanger numbers. Both airlines are members of the Lufthansa group.

PANNERGY INAUGURATES 30MW GEOTHERMAL POWER PLANT Hungarian geothermal−energy company PannErgy inaugurated a 30MW thermal− power production unit in the city of Miskolc, in northeastern Hungary, the company announced on September 9. An expansion of the PannEnergy’s KUALA power plant, the new production unit will supply electricity to downtown Miskolc and the city’s university. This is the second leg of the company’s geothermal energy project in the city. KUALA’s new unit was supported with a HUF 1 bln state grant within the framework of the New Széchenyi Plan. PannErgy saw net losses of HUF 165 mln in H1 this year, down about two−thirds year− on−year. However its revenue totalled HUF 1.27 bln in H1, growing approximately three− and−a−half times higher from H1 of last year.

PannErgy is an Equities Prime−category issuer at the Budapest Stock Exchange.

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2 Business

Budapest Business Journal | September 19 – October 02, 2014

07

Sharing economy is here to stay H

ave a spare bedroom you’re not using? Go to Airbnb and turn it into a source of revenue for a few days. Taking a road trip with no one to talk to? Rent out your empty car seats on BlaBlaCar and help cover the cost of your travel. Need someone to walk your dog, watch your children, do a one−time big cleaning or put together that Ikea furniture you bought? Various websites can help you find someone who’s got time on their hands and is ready to help.

The Internet is making it possible for everyone to rent out bits of their time or their space – to share any of their spare capacity. The sellers can become entrepreneurs with no capital investment and their customers are happy because they are able to obtain exactly the services they need, without having to make unnecessary purchases. To rewrite the old idiom: “Why buy the cow when you can get the milk by the glass?”

This phenomenon is now being called the sharing economy, though it’s hardly a new idea: communal gardens and other manifestations of this sharing have been around since people have lived together in communities. But now that computers, mobile phones and other communication devices have turned the world into a small village, the sharing economy has gone global. Deutsche Telekom Group has seized on the rapid growth in this sector, and is currently involved in an all− out campaign of public awareness and promotion of the sharing economy and the new players it has brought to market.

Hungary was chosen as a launching point for the campaign, which is being initiated at the same time here and in Macedonia.

“There is more than $500 billion in the sharing economy worldwide,” Magyar Telekom CEO Christopher Mattheisen told the audience of a September 10 information session about the issue.

According to Meshing.it, there are 9,128 companies providing sharing services operating in 130 countries and 1,500 cities. Rachel Botsman, the author of a book on the sharing economy, says the consumer peer−to−peer rental market – which operates through websites like Airbnb – was worth $26 bln in 2013.

AN ECONOMY THAT FLOURISHES IN 4G While the market may be growing, it can still be asked: Why does a telecom company care about people hiring out their spare room to tourists or sharing other services? According to Mattheisen, the answer is traffic.

“A network is not a static place. It’s not like owning an apartment, where you find one tenant and you’re done. The network is a place that needs to be filled up every day,” he said. “In the end, our basic desire is to develop interest in our platform, our core business, to show there is more to do with our 4G network other than sharing home videos.”

At an earlier Telekom roundtable on the sharing economy, held in August, Dr. Gergely Kis, a partner at eNet, said a survey by his firm found that “23% of interviewees clearly favor the regulated sharing of goods, 27% rigidly distance themselves, while the remaining 50% are in between the two extremes.” A summary of that round table noted: “The number of users shows remarkable increase, though.

There are 18,000 flats offered in Budapest on Airbnb, while Loffice Coworking, offering community office space, already operates four units in the capital.”

Some of the representatives of Hungary’s new sharing economy were present at the September 10 meeting, including: Oszkár – a ride sharing website that helps drivers and people who need a ride meet up, so they can share travel costs.

30km.hu – a website that promotes a “locavore” approach to food, by helping bring together growers who are within 30 kilometers of the consumers – thereby helping reduce preservatives in the food and unnecessary transport of produce. rukkola.hu – a digital book sharing website.

Piqniq – a social networking app based around food that helps people share recipes and information about restaurants.

KAPTÁR – a community office.

THE NEED TO BUILD TRUST Another guest at the September 10 discussion was BlaBlaCar, a sharing economy website that started in France and has since expanded to several European countries with an investment in 2009.

“We connect drivers with empty seats with passengers looking for a ride,” said Christian Schiller, a representative of BlaBlaCar, who helped the service expand in Germany. He explained that the company’s name refers to a feature on the website that helps compatible drivers and passengers meet up: The people who don’t like to talk a lot can rate themselves as “bla”, while those who want to pass the time on the road with a lot of chatter can rate themselves as “bla bla bla”.

Schiller said acting as an intermediary bringing like−minded people together is the main role of his website. He said the sharing economy requires a certain amount of trust between strangers and added that this is where the Internet can help. “The real purpose of the website is to enable you and me to get into the same car.”

For this reason, going online was not enough, Schiller said. He said his firm organized events to bring users together for face−to−face encounters. “We invite

members of the early adopter community to these offline events,” he said. “In Germany, we needed to speak more to the passengers, to build their trust.”

The big sharing site Airbnb, which lets people rent out their flats online, was represented at the September 10 gathering via a videoconference call from Christopher Cederskog, who also emphasized the importance of trust and building a local community.

“We’re very excited about the strong growth of Airbnb in Hungary,” Cederskog said. “One of the things we’ve noticed in the last few years is that you really need to build trust in our community. That’s why we want to make connections in Hungary. ‥. In this sharing economy the startups that succeed start small and take care to nourish their early adopters. It’s more important to find 100 people who love you, not just millions of people who kind of like you,” he said.

Due to this local nature of the sharing economy, there is a lot of room for local growth, right here in Hungary, Mattheisen said. To support this, the company has created the www.telekom. hu/kozossegereje website, and also an umbrella platform that is available to users of mobile devices, where it can introduce and make easily accessible Hungarian start−ups, he added.

Sponsored by: Magyar Telekom

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08 2Business

Budapest Business Journal | September 19 – October 02, 2014

REGIONAL NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, REGIONAL TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

CZECH PPI UNCHANGED IN AUGUST Czech producer prices remained unchanged year−on−year in August following the 0.1% drop in July, the Prague− based Central Statistical Office reported on September 16. This was in line with the expectations of economists. Prices in the mining and quarrying sector dropped 3.6% annually in July and that of electricity, gas, steam and air conditioning tumbled by 8.6%. On month, producer prices remained flat in August. Separately, the statistics agency announced that import prices were unchanged month−on−month in July. Annually, import prices moved up 1.8%. Export prices rose 0.3% m/m in July.

On a yearly basis, export prices grew 3.9%.

IKEA OPENS POLAND’S LARGEST SAWMILL Swedish home furnishings giant IKEA opened Poland’s largest sawmill on September 16 in the southeastern city of Stalowa Wola, Radio Poland reported.

The investment has cost IKEA PLN 33 mln (€7.8 mln), covering two plots of land with a total area of 25 hectares. Currently 43 people are employed by the sawmill, although numbers are set to rise once the site has completed all test phases. Poland is a key production location for IKEA, and it is second only to China in terms of the quantity of items manufactured by the Swedish firm. Lumber from the sawmill will be mainly used in IKEA factories in Poland and Slovakia.

AMAZON PLANS ANOTHER CZECH LOGISTICS CENTER The global e−commerce giant Amazon is planning to build another logistics facility in the Czech Republic. In addition to an existing returns center and a large warehouse whose construction began last week, Amazon is also looking to build another facility in central Bohemia, daily E15 reported on September 15. According to the report, after months of negotiations with local authorities, Amazon officially launched the construction of its new logistics center in Dobrovíz. The online retailer, which is to spend some CZK 2.1 bln ($98.9 mln) on the new facility with a total area of 92,000 square meters, plans to open the plant in the next summer, creating some 1,700 permanent jobs as well as some 3,000 temporary positions.

The online retailer already operates one such facility at the same site. A reverse logistics center which serves as a distribution hub for goods returned by shoppers opened last year in Dobrovíz.

MINISTER: SLOVENIA TELEKOM SHOULD BE SOLD AS A WHOLE Slovenia will have to sell its telecom operator Telekom, as a whole, as promised to international investors, incoming finance minister Dusan Mramor told a parliamentary committee hearing on September 15. He rejected suggestions from some members of the new Prime Minister Miro Cerar’s center−left bloc that Telekom should be split into infrastructure

and service units before it is sold, so that infrastructure would stay in state hands. Analysts said such a move could considerably dampen investor interest.

Mramor was due to be voted in as the new finance minister on September 18, when Parliament was also expected to confirm Cerar’s cabinet.

HUAWEI PLANS €100 MLN INVESTMENTS IN ROMANIA Chinese company Huawei plans to make investments of €100 mln in the Global Service Center in Bucharest until 2018 and wants to hire 300 more people in Romania by the end of this year, reported local business site Capital. According to the report, the company allotted €6 mln for the development of the Global Service Center in Romania’s capital, which provides technical support for customers in Central and Eastern Europe, Nordic countries and those in Western Europe, and plans to increase investments to €100 mln until 2018. This amount adds to the €90 mln Huawei invested in the Romanian subsidiary between 2007 and 2012. Huawei currently employs 900 people in Romania, out of which 700 are Romanians, and plans to increase the number to 1,200 by end−2014, Vlad Doicaru, manager Enterprise & Integrated Accounts within Huawei Technologies Romania, told the web portal.

EMIRATI COMPANY SUBMITS OFFER FOR SERBIA’S CHARTER AIRLINE A Dubai−based company has sent in an offer for the purchase of Serbian charter airline Aviogenex, reported Ex−YU Aviation News. The offer comes after the government put up 502 state−owned companies for sale a month ago, among which is Aviogenex. Prior to the break−up of Yugoslavia, Aviogenex was the busiest charter airline in the country, handling over half a million passengers per year in the late 1980s. However, the carrier has fallen on hard times with a single and aging Boeing 737−200 jet grounded at Belgrade Airport and a handful of employees. The deadline for the submission of bids has been set for September 15.

BAUMAX SELLS BULGARIAN STORES TO LOCAL INVESTOR Struggling Austrian home improvements group BauMax has sold its Bulgarian unit with eight stores to local investor Haedus JSC, it said on September 11, taking another step in its campaign to shrink back to health. It gave no fi nancial terms for the deal, which still requires regulatory approval. BauMax sold its Romanian business in July and said in April it was closing its seven outlets in Turkey. BauMax, which like other home improvements chains in Europe has suffered from weak demand due to sagging housing markets and depressed economies, is working to implement by 2016 a restructuring plan worked out with creditor banks including Raiffeisen, Erste Group and Bank Austria. BauMax,

EWA KOPACZ NAMED POLISH PM President Bronisław Komorowski officially appointed Ewa Kopacz as Poland’s new prime minister designate on September 16, after Donald Tusk’s election to lead the EU’s European Council earlier this month. “This is a difficult task at a difficult time,” Komorowski said, confirming that a new coalition cabinet will be appointed on September 22. Kopacz, a former health minister in the center−right Civic Platform−led coalition, in power since 2007 and re−elected in 2011, will lead the party into the next general election campaign, scheduled for the fall of next year. Kopacz will be Poland’s second ever female head of government after Hanna Suchocka led a centerist coalition from July 1992 to October 1993, during the presidency of Lech Walesa. which lost €189 million ($244 million) in 2013, at one stage had 158 outlets, almost half of them in Austria and the rest in the Czech Republic, Slovakia, Hungary, Slovenia, Croatia, Romania, Bulgaria and Turkey.

HEINEKEN IN TALKS TO SELL CZECH OPERATIONS Heineken, the world’s third−largest brewer, is in talks about selling its Czech operations to Molson Coors, a Czech newspaper reported, citing unnamed industry sources. “The talks are already a reality even if it is not certain how they will turn out,” daily Lidove Noviny quoted one of two sources as saying. Heineken is the third biggest brewer in the Czech Republic, where beer consumption is the highest per capita in the world, but the newspaper said it aimed to be first or second in the markets in which it operates.

SABMiller’s Plzensky Prazdroj is the Czech market leader ahead of Molson Coors.

CROATIA CONSUMER PRICES FALL FURTHER IN AUGUST Croatia’s consumer prices declined for the seventh consecutive month in August, figures from the Croatian Bureau of Statistics showed on September 16. The consumer price index fell 0.3% year−on−

year following 0.1% drop in the previous month. The index has been falling since February.

Month−on−month, prices decreased 0.1% after a 0.4% drop in August.

It was the third monthly decrease in a row.

POLAND CORE INFLATION UNEXPECTEDLY ACCELERATES IN AUGUST Poland’s core inflation unexpectedly rose in August, data from the National Bank of Poland showed September 16. The consumer price index (CPI) excluding food and energy prices climbed 0.5% annually following 0.4% increase in July. Economists had expected the core inflation figure to remain unchanged. On a month−on−month basis, the core CPI remained unchanged in August, same as in July. Economists had forecast a 0.1% drop in the index.

POLAND AVERAGE GROSS WAGES RISE IN AUGUST Poland’s average gross wages grew less than expected in August, data from theCentral Statistical Office revealed September 16.

Average gross wages climbed 3.5% year− on−year in August, the same rate as seen in July. Economists had forecast wages to grow 3.8%. On a monthly basis, average gross wages declined 1.8%, sharper than the 1.5% drop forecast by economists.

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2 Business

Budapest Business Journal | September 19 – October 02, 2014

09

EXPERT OPINION

CIB and SMEs: Awareness, perseverance, trust The following is an interview with Róbert Szerdahelyi, CIB’s SME Regional Director, who explains what his bank is doing to support Hungary’s vital small- and medium-sized enterprises.

BBJ: As SMEs are considered to be the backbone of – and a main driver for – both the global economy and individual countries, how do you think Hungarian SMEs contribute?

Róbert Szerdahelyi: The SME sector is the one of the most important player in today’s Hungarian economy, even if the majority of SMEs face a lack of capital.

During financial negotiations with our clients, our experience is that the main focus of financing is overcoming a lack in funding but the situation is much more positive than five years ago – at the beginning of the crisis.

BBJ: Along with credit, what else do SMEs need for their daily operations and long-term survival?

R.Sz:Generally speaking, the SMEs are on a wide spectrum; involve a lot of type of companies. Inside CIB, SME department focus on middle-sized enterprises – ranging from HUF 200300 million to HUF 10 billion – is the CIB SME division, which has been handled separately by CIB since the beginning of 2010. Separating this division was an important and successful step.

The demands of this segment involve current asset financing, prefunding of tender proposals and investment credit. Which is a massive segment of SMEs is the upper division, which is less characterized by a lack of capital.

This segment sees more capacity building and investment promotion. CIB offers a specialized and well-prepared consultancy service to SMEs segment.

Since 2010, we have been building our services in order to meet the needs of SMEs in these segments. A customer survey in July 2014 investigating client satisfaction showed that our clients are open to developing trust towards our consultants and to being partners with our institution. This is reflected by them voluntarily providing a daily information flow for us, which enables us to offer maximum cooperation with our clients. I believe that July’s survey confirmed that our conscious professional development has been on the right track, as both client satisfaction and loyalty produced better figures when compared to last year’s measures.

BBJ: How does CIB help SMEs? Tell us more about your special programs for them. What do your consultants do to help SMEs? R.Sz.: Let me demonstrate this through an example. Fourteen years ago an automotive supplier started working with us. We provided account management for the company that had annual revenue of HUF 5-600 mln. It was a stable and classic SME on the Hungarian market. During these 14 years we have developed our relationship and cooperation step-by-step. Following

account management, we registered a small amount of overdraft facility, which was later raised. The next steps were several investments, tool development programs and lease financing. Now the company has an annual revenue of approximately HUF 5 bln. Our cooperation is exclusive; the company has no ties with any other financial institution. Achieving results like this requires a bilateral and step-by-step contribution of hard work and trust.

This service is also good for financing current assets. Important added value is that our consultants have to explore the real needs of the clients, as in the majority of the cases our clients arrive at our institution saying that they need

clients, they make product offers for the clients, which might not be in line with the real demand of the client.

BBJ: What are CIB’s plans regarding SME sector in the following years?

BBJ: When a company is beginning a new life cycle and needs new services, do you tell the company about new possibilities, does the company come to you with new demands or is it a mutual decision?

R.Sz.: This is always the result of a joint planning. It is important to note that our main aim is not selling our products but understanding the needs of our clients, in order to offer them services best suiting their plans. Here the client needs to understand that the added value that we provide is worth more than a price advantage of 1-2 percentage points. Thus, we do not want to be the cheapest institution, as we are sure that the service we provide is reliable and high quality, and will earn more in the long-run than through saving money with cheaper services.

BBJ: How are Hungarian SMEs supported by the “Funding for Growth Scheme”?

R.Sz.: The press presence of the “Funding for Growth Scheme” (FGS) has reached its aim, as our clients know about the scheme and consciously look for it when they are planning capacity building, investments and development.

Róbert Szerdahelyi (40): Joined CIB Bank as SME relationship manager in 2000. Between 2002 and 2006 he worked as branch manager in different locations. Later he worked as SME sales head of Central Hungarian Region, from 2006 until 2010.

In 2010, when the separate SME division was established, he was appointed the regional manager of SME Pest and North−East Region.

He is married and happy father of two children (3 and 9 years old daughters).

CV money. FGS is commonly sought and I believe that CIB was among the leaders in providing this package in the first phase and also in the second phase of the program.

BBJ: What do you think is needed for a successful SME? R.Sz.: Referring back to the successful automotive supplier, I would say that trust is a key factor. The company needs to trust us to send us information, so that we can work together flawlessly. I believe that a financial institution operates well if stays in the background, unseen. If trust is gained between the two parties, we can foresee critical points and we can prepare to handle them. We have to adjust ourselves to plans of the client, and offer services that serve their needs.

In my opinion, many banks make a mistake at this very point: instead of suiting their services to the plans of their

R.Sz.: Based on CIB strategy up to 2017, CIB SME division outlines achieving and maintaining an active market presence.

As an innovative partner, we would like to be an active financing institution for the Hungarian SME sector in the upcoming years. We are continuing our building and planning and we would like to offer innovative solutions for players in the Hungarian SME sector. We would like to be different and outstanding in the sense of consultants and service. We are working to offer real opportunities to our clients and to maintain a prosperous and long-term cooperation.

www.cib.hu

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

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BBJ

3Special Report Market overview: Green offices

12-17

GREEN BUSINESS Protecting the environment is no longer just a nice idea, it is essential to business survival.

In this section, we look at how businesses can grow while staying sustainable.

Hungary tilts against windmills

20

12

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3

Budapest Business Journal | September 19 – October 02, 2014

MARKET OVERVIEW:

Green offices in Budapest We asked the people behind Budapest’s largest environmentally friendly offices to tell us about the field and explain what makes them special. These are the answers we received. A full list of major market players appears on pages 24−26. solutions can contribute to their own positive company qualification.

BBJ STAFF

Bank Center

Eiffel Square.

Bank Center.

Gábor Gáborjáni Szabó Member of RICS, Property Manager How green is your building? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your office buildings?

The Bank Center completed modernization and replacement of the mechanical systems and equipment in the building in 2012.

The work started at the beginning of 2012 and was finished by the end of 2012. It consisted of the following tasks: • Replacement of the liquid chillers (four pieces) with modern units equipped with VFD [variable frequency drive] compressors.

• Replacement of the split liquid chiller (one piece).

• Installation of New Air Handling Units (four double units) with rotary drum heat recovery.

• Replacement of the main−circuit (and auxiliary−circuit) pumps with an up−to−date pump with VFD [variable frequency drive].

• Replacement of certain boilers equipped with atmospheric burners with condensation− type boilers.

• Production of solar hot water (SHW) with the use of solar collectors.

These replacements guarantee compliance with the highest building standards and allow the landlords to provide “green certified” offices.

The BC management offices received the worldwide recognized LEED SILVER title, and the building itself was awarded BREEAM In use/Good and the building management achieved the qualification of BREEAM In use/very good.

How important is a green building when it comes to containing costs?

“Green Investments” pay better to the landlord than any other type of investment.

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

The real question is not the payback period but rather whether you will be on the market with your investment or not. In the long term, the rent level should reflect the level of investment.

How important is a green building when it comes to attracting customers?

It is primary.

Do many tenants mention a preference for a green building as a reason for moving in?

Tenants don’t mention it at first, but it will hold a prevailing place in the final decision making process.

Do you think that your buildings are filling up faster than typical Budapest office space? If so, why?

Yes, because of the continuous modernization in general – aesthetically, technically and mechanically.

Why are your buildings the best place to locate an office in Budapest?

Because they are!

Is there anything else you’d like to add?

Currently, there’s a market for the best and for the cheapest. Projects of the average or indifferent quality and service are struggling.

ConvergenCE

Zeley Csaba Director of Asset Management

How green are your buildings? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your office buildings?

The buildings we property manage – Eiffel Square and Vision Towers North – are both BREEAM certified green buildings.

There is bicycle storage in the underground parking, with shower and changing rooms.

Our green roofs, covered with succulents, contribute to reduce water consumption as no irrigation is needed. An extensive park area with waterfalls, protected trees, outside bicycle storage and bird friendly solutions add to the pleasant park atmosphere.

There are 12 bird haunts, and breeding nests for kestrels and swallows. Pleasant benches provide a relaxing area for the tenants. Also, an extensive green terrace area is available for our tenants on the first floor. We have introduced complete green management, with selective waste collection and removal, use of green detergents and recycled paper products.

We apply new technical achievements to reduce energy consumption.

How important is a green building when it comes to containing costs?

The applied innovative solutions and energy saving systems can work to contain costs, as these represent the major part of service charges. Smaller items include the selective waste removal, which is far more economic than communal waste removal.

Do many tenants mention a preference for a green building as a reason for moving in?

Nowadays international companies do have preference for green buildings in accordance with their company policy.

Do you think that your buildings are filling up faster than typical Budapest office space? If so, why?

It speaks for itself that both of our buildings are 100% let. The reasons are the good location, green qualification and excellent services. Eiffel Square is not only an office building – it is a lifestyle. Vision Towers North is a great corporate headquarters.

Why are your buildings the best place to locate an office in Budapest?

Eiffel Square is near the city center, at a metro station with additional public transport opportunities, with parking for tenants and the public in the basement, extensive green park areas in front of the building, all kind of services in the building and nearby. Vision Towers North is at Vaci Corridor, the preferred office location in Budapest, at a metro station two stops from the city center. Both buildings have good visibility and a panoramic view from the office areas.

Is there anything else you’d like to add?

We are very proud of our buildings and pleased that our tenants appreciate our efforts to make both buildings comfortable, with services beyond their expectations.

Corvin Buildings

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

When talking about initial investment, the additional cost can be leveraged with proactive selection. You cannot achieve higher rent for just a green qualification, but you have a much higher chance to lease your building in a shorter time, and that obviously means more income.

How important is a green building when it comes to attracting customers?

For most of our tenants, it is a value that they are in a green qualified building.

Their headquarters regularly monitor their own activities, including the locations and services provided in their offices. It is highly appreciated when green and sustainable

Gábor Radványi Chief Architect of Futureal How green are your buildings? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your office buildings?

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Budapest Business Journal | September 19 – October 02, 2014

Corvin One. Millenium Towers.

If I were a marketing manager, my answer would be: very green or even dark green to compete with the greenwashing slogans we hear day by day. The honest answer, according to our BREEAM certificates (BREEAM is the British code for a sustainably built environment) is that we have buildings that received pass, good and very−good levels. As far as I can see, from the technical point of view, our buildings are well above the average office projects in terms of sustainability. This is not only because of the “green features” we built into them, but also because they are not greenfield investments, but part of a large scale city regeneration project, which takes them to a different level.

How important is a green building when it comes to containing costs?

Budapest has become a really interesting market from the green point of view in the last few years. The post−crisis projects can’t afford not to be sustainable and not only from the financial perspective. A few percentage points in extra cost, having a green consultant in the design phase and following the methodology of one of the green certificate systems (BREEAM, DGNB, LEED) pays returns, especially if you consider those unlettable assets that tried to ignore this way of thinking.

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

As I mentioned, calculating ROI on the effort to try to make your building more environmentally friendly or a good workplace is really difficult. If we concentrate only on the figures, it’s clear that the investment of the developer pays its return to the future tenants. How can you calculate the shorter leasing periods of enthusiastic tenants, or count those tenants who didn’t come to your project because of the lack of green certification? Most of the benefits are on the tenant’s side: They pay lower operating costs, their employees are working in a healthier office and demanding less sick time – but these benefits bring them to Corvin in the first place.

How important is a green building when it come to attracting customers?

We shouldn’t look at green buildings as attractions. This type of design and development should be natural − which is the best word to describe this mission.

Today, most customers and tenants have become environmentally conscious, so even if they don’t go into the details, they define a minimum level of green certificates as requirements.

Do many tenants mention a preference for a green building as a reason for moving in?

Most of the time the green label is just one element on their checklist as a must, but there are more and more tenant’s representatives who are green professionals, so through them the tenants can understand the difference between the selected projects.

Do you think that your buildings are

filling up faster than typical Budapest office space? If so, why?

We are very proud of our buildings, and the whole Corvin Promenade Project is really successful. A good company respects the needs of their employees. When they come to our project for the first time, we still meet people who are amused. They just can’t believe that we built such a new European neighborhood in the city.

Why are your buildings the best place to locate an office in Budapest?

The advantage we have here in the Corvin Offices is that people like working here.

Simply because an office building is built sustainably, doesn’t meant it will please the workers. An office project should provide easy and convenient access by car and public transportation, and also relevant service coverage, restaurants, sport facilities and a friendly public space. That’s what we created, and you can see on the face of the people at the Corvin promenade that it works!

Is there anything else you’d like to add?

When we started our project 10 years ago, we analyzed how people use their cities. We tried to fulfil all of their needs and wished to create a tailor−made new place for them.

As office workers bring life to our project in the day−time, our aim was to serve all of their requirements, too. I myself have been working in a Corvin Office for more than five years, so I test it and feel it day by day.

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resulted in a 30% reduction in energy, waste and water consumed and carbon generated during its subsequent operation. A good example of an “in use” certification, is our certification of Science Park as BREEAM Very Good, which included the installation of a heat recovery system that has reduced heating costs by 65%, resulting in a payback of less than three years.

good transport infrastructure. Occupiers are attracted to the best combination of quality and price as evidenced by our occupancy levels and tenant satisfaction surveys.

How important is a green building when it comes to containing costs?

Service charges, which include utility consumption, are a large percentage of overall occupancy costs, and owners incur these costs directly on vacant space in their buildings. As a result, the reductions outlined above contribute directly to lowering occupancy costs and increasing the profitability of our investments.

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

When someone is acquiring Class A buildings today, it is assumed that the buildings have been designed, constructed and operated with sustainable specifications. Class A buildings by their nature exhibit higher occupancy at higher rental levels, so whatever the premium is in the initial investment it is more than recovered over a typical hold period, even prior to the exit premium.

How important is a green building when it comes to attracting customers?

Sustainability is a primary criteria for all multi−national and most local occupiers.

Building H in Millennium City was preleased, prior to the commencement of construction, to one of the largest European financial institutions on the basis of a competitive tender which included “green building” features as an absolute requirement. We can also share our experience with Ericsson, who is the primary occupier of Science Park and participated with us in the BREEAM “in use” process by certifying its own organization along with the building and the management. Our understanding in working with the Building Research Establishment that administers BREEAM is that this is the first time a property in Central Europe has received all three levels of certification.

Do many tenants mention a preference for a green building as a reason for moving in?

Both new tenants and existing tenants when extending their leases cite the sustainability investments that Heitman has made as being a fundamental reason for their decision.

David Brodersen Senior Vice President, Portfolio Management − Europe How green are your buildings? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your office buildings?

Heitman managed funds own eight office buildings in Budapest. They were built by leading developers between 2002 and 2011 as Class A office buildings, which typically are operated more efficiently when measuring environmental footprints. A good example of efficient design and construction is Building H in Millennium City, which was pre−certified LEED Gold during its design and received a LEED Gold Shell and Core designation upon completion. This has

Do you think that your buildings are filling up faster than typical Budapest office space? If so, why?

The Budapest office market has an overall vacancy rate of approximately 20%.

Vacancy in Heitman owned buildings is roughly half that level.

Why are your buildings the best place to locate an office in Budapest?

Heitman is a global investor in real estate and an office occupier itself, with European offices in London, Luxembourg, Munich and Warsaw. We operate the portfolio with our own global standards and best practices in sustainability in mind. Our Budapest portfolio is made up of high quality buildings located in desirable submarkets (Central Pest, Central and South Buda) with

Laurus.

Laurus Offices Ágnes Vuk Architect, Head of Project Development, Erste Group Immorent How green is your building? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your offices?

Opened in 2011, Laurus Offices was one of the first office developments in Budapest that paid special attention to sustainability considerations. Accordingly, it was also one of the first projects in Hungary to receive a “very good” international post−construction certification from the Building Research Establishment Environmental Assessment Methodology (BREEAM). The building complex has been built following the latest European energy requirements, and it uses modern technical solutions, such as thermal insulation technology, more efficient than standard noise and heat protection on the facades, electronically controlled external solar shades, environmentally friendly interior design materials, and thermal bridge free structures.

How important is a green building when it comes to containing costs?

Thanks to the latest technology that was installed, Laurus Offices consumes 30% less electricity and 25% less water than other A−category offices of the same age and size but without a sustainability certificate. Thus the costs of operation at Laurus Offices are also lower than the operational costs of other buildings.

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

The initial investment is greater, but it’s hard to show the difference, because you would not build a new building with old technology anyway. In the case of the latest office developments, it is expected that the buildings are certified according to one or other major certification method. All office buildings currently under development in Budapest are being certified, while the buildings built in the past one or two years either have certifications or are currently seeking one. A certified office building offers advantages both to developers and tenants. For developers a certified office building not only means reduced environmental impact, but it also offers advantages in the competition for new tenants. At the same time more and more companies follow environment− conscious philosophies and seek environmentally friendly daily

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operations, and the resulting savings are favorable from a financial point of view.

How important is a green building when it comes to attracting customers?

For potential tenants, one of the major attractions of green offices is potentially lower operating fees offered by the certified buildings. Due to corporate governance guidelines, more and more companies can only select certified buildings for their offices or headquarters. For many tenants, beyond the environmental and cost efficiency factors it offers them a marketing advantage if they can claim they operate in buildings with high environmental certification. In general it is a fair statement that it is easier to find tenants for green buildings and that the tenant mix in green offices is more favorable, as these companies tend to have more solid financial background. The expansion of the green office market in Budapest also stems from the growing demand of tenants for sustainable offices. While at the end of 2012 a mere 18 buildings possessed some sort of environmental certifications, their number has grown to 30 within 18 months.

Do many tenants mention a preference for a green building as a reason for moving in?

Yes. Tenants’ demand is growing for sustainable offices. It offers value for them that operating costs may be much lower in certified buildings than in regular ones. Currently, however this is a priority

Budapest Business Journal | September 19 – October 02, 2014

mostly for international corporations and for the majority of tenants – while they appreciate environment friendly solutions – this is not the most important criteria when selecting office space.

Office Garden II

Do you think that your buildings are filling up faster than typical Budapest office space? If so, why?

As for Laurus, location makes the decision a special one. While the building is attractive from an environmental point of view, its location makes it a best choice mostly for those companies that need a fast connection to the airport.

Why are your buildings the best place to locate an office in Budapest?

Laurus offers the best combination of favorable price−to−value ratio, modern outfitting and proximity to the airport.

For tenants looking for the combination of these factors, Laurus comes as the top choice. The great advantage of Laurus is that it is close enough to the Liszt Ferenc International Airport, which counts as the main artery of Hungary’s trade. As widespread business travel is becoming more frequent again, proximity to the airport counts as a great advantage to the multinational companies when they are looking for a new office in Budapest. With user−friendly and novel solutions, and a well thought−out green environment, Laurus Offices offers superb services, a healthy, livable and efficient working environment, and one of the best transport locations in Budapest.

Róbert Papp Senior Consultant – Office Leasing How green is your building? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your offices?

Office Garden II recently was awarded LEED Gold certification, which means it belongs to those few office buildings that have managed to fulfill the high standards of LEED Gold after completion.

GRT Group, the developer of the building, laid heavy emphasis on the use of environmentally friendly technologies during construction. Office Garden II has its own energy center and its own heat pump; the double electric power supplies operate independently of one another. The VRV cooling−heating system

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EXPERT OPINION

DVM group: an expert in energy efficient design-and-build solutions, green building certifications and sustainability initiatives Interview with Tibor Massányi, managing partner and head of design, project management and environmental consultancy at DVM group.

BBJ: How important are sustainability and efficiency considerations in your complete portfolio? What do you consider your main role as a market leading design and construction company?

TM: DVM group offers the most comprehensive range of building services in Hungary. Sustainability (via the environmental consultancy arm) is integrated into all core activities such as design, project management, general construction, development management and construction management. Based on 20 years of experience in the real estate sector we find it quintessential to consider sustainability as a main criterion for each and every type of project, and project cycle.

Whether designing a new office building or industrial facility, managing a reconstruction project, or fitting out a retail or commercial interior, DVM group’s main approach is to find the most efficient and environmentally conscious solutions.

In line with the changing culture of corporate policies focusing more and more on protecting our natural resources and creating a healthy work environment, clients have also become more aware

and conscious of choosing sustainable solutions. To respond to client needs, we provide general sustainability consultancy services, LEED and BREEAM assessment and guidance for sustainable design, as well as energy efficiency studies and sustainability strategies. When it comes to client preferences, it is not necessarily the existence of an entire building’s or a given commercial interior’s environmental certificate that makes the biggest difference, but the totality of the energy- and water efficient solutions that ultimately contribute to financially optimized maintenance costs and service fees. They range from the use of solar collectors, photovoltaic panels and grey water to recycled and certified built-in materials, water-efficient aerators, LED lights, daylight and motion sensors, and preprogrammable elevators. Services such as bicycle storages with lockers and showers encourage a healthy commute to work, electric and hybrid car chargers inspire a more environmentally conscious choice of vehicle, while green roofs and green walls literally bring a breath of fresh air to the properties we design and build. Throughout the development and construction phases we engage in the most professional

and environmentally responsible waste management and recycling.

Beyond the technical and consultancy services that we provide to our clients, we also find it important to be part of a wider social discourse about sustainability, to fulfill an educational role, and to contribute to policies that will later define our profession.

As members of the Hungary Green Building Council (HuGBC), we are confident that we are in the position to do so.

We have been a traditional partner of the HuGBC Green Walk event series, opening our buildings each year to the general public as part of a guided tour. We are already counting back to this year’s Green Walk that will take place during the global World Green Building Week (22-27 September).

We are also happy to be one of the main sponsors of the ‘Build2Gether Green Retrofit International Conference on Green Building Renovation’ (24 September), where we will further tackle the challenges of restoration and sustainable development in the most fitting event venue, Eiffel Palace Conference Center (in Hungary’s first office building with a planned double green certificate). www.dvmgroup.com

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uses renewed energy, and the building is completely natural gas−independent. The CO2 emission of the office block is 0.00 g/ year. Selective waste collection and proper facilities for bikers are also available. One fun fact: Cigarette butts are selectively collected and recycled.

Thanks to all of the applied technology, the total operating costs are considerably lower than the average.

How important is a green building when it comes to containing costs?

Due to the excellent energy−efficiency of the building, the service charge is permanently under €3/sqm/month.

Compared to other office buildings in Budapest, this means a monthly savings of €0.5−€1/sqm/month. In the long run, this is important not only in terms of the environment – it also means significant cost savings for the tenants, a serious consideration when we negotiate with potential new tenants or current occupiers.

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

Office Garden II was built on a green “foundation” from the beginning, so the building already had the proper technical solutions required by the green certification methods. Thanks to the inclusion of the green concept from the project phase, no further considerable expenditure arose during the certification process.

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How important is a green building when it comes to attracting customers?

If a building holds a green certificate, and is determined to operate in an environmentally friendly way, it means added value for most of the enterprises in Hungary. They are glad if this type of building helps them reduce their operational costs. However, most of the companies are still cost−sensitive and not willing to pay any additional cost. From the landlords’ point of view, a green certificate could be a competitive advantage when they are seeking to attract new tenants.

Do many tenants mention a preference for a green building as a reason for moving in?

Green certificates are playing an ever more important role during the selection period. The demand for certificates appears especially on the list of selection criteria for large international companies. In our experience, in the final stage this is not the deciding factor.

A green certificate may not be necessary if other financial factors are stronger. At the same time, a certification can help in retaining tenants, if a previously built building obtains green certification after modernization.

Do you think that your buildings are filling up faster than typical Budapest office space? If so, why?

Office Garden II is a successful project on the Budapest office market because the developer started the building with a great original concept. In line with Western experience, the development started with a commitment to maintain an environment−friendly project with cost−saving investments. We had already seen after the first negotiations that the demand for this approach is huge and tenants welcomed these unique amenities. The success of the development was proven by the fact that, two years after the handover, Office Garden II reached 95% occupancy level and there is constant, positive feedback from those occupying the building.

Why are your buildings the best place to locate an office in Budapest?

We believe that the secret lies in the office park concept and not only in the eco−friendly attitude. There are plenty of green spaces that provide a pleasant and inspiring working environment, a place where people enjoy working. Other key elements are the cost−efficiency and reasonable price−to value ratio; the latter is one of the most important decision− making factors for companies.

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Office Garden III will be an even more efficient office building and also a very successful development – offering not only a green certificate, but also a really environmentally friendly and enjoyable workplace.

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Skanska

AndrĂĄs Schmidt Sustainability Manager How green is your building? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your offices?

Green House Office building is the first and to−date only “LEED Core and Shell� Platinum certified building in Hungary. The Platinum level was awarded with an exceptionally high 93 points. The property also earned the Green Building certification of the EU Green Building Program for energy efficiency of non−residential buildings. Public transportation connections, underground stations and bicycle lanes are available just steps away from the building. Bio−diverse green roofs are located on the top level around the tenant’s premises, in order to prevent the heat island effect, reduce the average temperature of the site and offer a spectacular view for our clients.

During construction, Skanska promoted health and safety, sustainable urban development and the regional economy by working with local construction workers and regional materials. As the owner of the property, Skanska also continued to work with tenants to enhance occupiers’ environmental awareness and encourage tenants to adopt “LEED for Commercial Interiors� certification for their own offices.

Last but not least, we wanted to create an office building with an excellent indoor environment.

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We create real value in property management

Is there anything else you’d like to add?

ConvergenCE is a boutique real estate strategic investor, developer, asset and property manager in Central Europe, with more than 20 years of

Skanska’s Green House.

Office Garden II.

We are looking forward to the start of phase three of the office park with great expectation, and we also have faith in the success of Office Garden III. We’ve been working on the project with GRT Group since the beginning. We think

Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your office building?

A carbon footprint calculation was conducted for the building, which will be used by Skanska as a benchmark to help identify embodied carbon savings on future projects. The building uses around 50% less water than a conventional Hungarian office

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experience. We provide proactive, transparent and tenant focused, high value property management services to a select group of clients.

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+36 1 225 0912

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building, and it includes a rainwater harvesting system as well as a soil water system for irrigation and toilet flushing.

We measure the necessary energy and water consumption – including lighting consumption, cooling and heating consumption– in the tenant’s area as well. Other features and solutions include occupancy and daylight sensors, geothermal pre−heating and pre− cooling systems, a double rotating heat− exchanger, solar panels for the domestic hot−water system (serving the restaurant mainly) and window opening sensors.

Excellent daylight in the tenant’s premises also contribute to the energy−efficient operation of the building.

The total energy consumption is less than 45% of that in conventional buildings.

How important is a green building when it comes to containing costs?

I would refer to the “Review of the Costs and Benefits for Developers” study – created by WGBC together with Skanska.

If the national green program is strong enough, if a green strategy is included in the budget from the early phases of the project, and if the developers select the proper experts, designers and consultants, the cost can be negligible to reach a strong general green level. However, if developers want to deliver to the market a BREEAM Excellent or LEED Platinum level, they have to consider the extra cost – but also extra efficiency in return.

Is the initial investment greater for a green building?

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Budapest Business Journal | September 19 – October 02, 2014

Development cost depends on the developer’s building culture for the design, construction and building operation. There are different green building levels, based on the international certification systems and local EPB regulation. Skanska building culture is high enough to achieve a higher level of green building.

How long does it take for you to regain the extra expenditure through rentals?

The present Hungarian market doesn’t pay a noticeable top−up rental fee for green buildings.

However, Green House has filled up with tenants relatively quickly because of the strong green brand of the developer and the building.

Eiffel Palace.

Where you able to get tax breaks, EU subsidies or other special support for the construction of a more environmentally friendly building?

This question is very relevant recently.

For the time being there are no subsidies implemented by the government or local municipality to support the green buildings.

I know there is a feeling that there will be some movement towards sustainable city or areas in Budapest, and the municipality will consider breaks in the building taxes or other cost breaks within the near future.

How important is a green building when it come to attracting customers?

The minimum requirement recently in Hungary is a good level of LEED or BREEAM certification.

Usually the big international tenants have a minimum requirement to move into certified buildings only. The tenants like a nice and useable garden, ample natural light in the office, public transport connections near to the building and flexible office spaces, not to mention the level of energy savings such a building can provide – features that naturally come with a greener building.

Do many tenants mention a preference for a green building as a reason for moving in?

Yes, mostly the big international clients because of their corporate sustainability policies. We can say that the question of green level is becoming a top priority, after the rental fee and location.

Fortunately, this kind of corporate green thinking is becoming typical among the employees as well.

Do you think that your building is filling up faster than typical Budapest office space? If so, why?

Definitely. The location of Green House is extremely good, the public

transport connections are located closed to the entrance.

Such an attractive green building has many other benefits as well, like: providing an excellent indoor environment and thus increasing the individual – and through that corporate – productivity; lowering operating and maintenance costs; and, enhancing prestige and corporate image.

Why is your building the best place to locate an office in Budapest?

The building is located close to the Váci corridor, which is the primary location for commercial buildings. Thanks to the “U” shape of the building, the internal garden is ideal for outdoor meetings and recreation in a green/natural environment.

Our direct neighbors are a kindergarten with a huge green area, a public park and new residential and office buildings.

What makes our buildings unique is the holistic concept of how we approach our clients and their requirements. The so−called “Workplaces by Skanska” concept highlights the importance of cost−efficient operation of tenants, the quality of the indoor environment and the surroundings of the building – in addition to the green features. This kind of approach is still not the rule but rather the exception on the Budapest office market.

We aim to fill up our next project, Nordic Light – the construction of which has just been started on the block between Váci út, Süllő utca and Visegrádi utca – by adhering to the pillars of this concept, and we are confident, that with this new

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office, and they greatly benefit from the low service fees and utility costs once within the building.

Green certifications are more a differentiating criteria than a deciding factor, but they are certainly gaining more and more weight in a tenant’s final decision of a new office building.

Budapest Business Journal | September 19 – October 02, 2014

development the success we had with Green House will continue.

Is there anything else you’d like to add?

Skanska educates all tenants and visitors about the environmental benefits of LEED certified green buildings. All current and potential tenants have been informed about energy efficient solutions and their benefits. During the lease negotiations we always present the LEED criteria. Those presentations are very important to enhance the importance of sustainable buildings, because buildings generate more than 40% of CO2 emissions during their operation.

Eiffel Palace office building

István Kerekes Leasing Director, Horizon Development

How green is your building? Can you list some statistics or mention some of the measures you have undertaken to reduce the environmental footprint of your offices?

Eiffel Palace is the first office development in Central and Eastern Europe that will have a double environmental certificate, meeting the strict criteria of both the British BREEAM and the American LEED green building rating systems. Some of the sustainable solutions that contribute to the BREEAM “Very Good” and LEED “Gold” ratings include the building’s excellent location and easy accessibility by public transportation, the proximity of bicycle routes, the solar collectors and photovoltaic panels on the roof, the five−story underground garage accommodating bicycle storages with lockers and showers as well as electric and hybrid car chargers, the pre−programmable energy−efficient elevators, the natural ventilation of the building, the daylight and motion sensors, the use of gray water, our beautiful green wall and green roofs, or the water efficient aerators and local recycling, just to name a few.

How important is a green building when it comes to containing costs?

Green buildings – with their energy− and water−efficient solutions – have proved to significantly reduce the costs of office buildings. Tenants consider it a top priority in their search for a new

Is the initial investment greater for a green building? How long does it take for you to regain the extra expenditure through rentals?

Horizon Development as a developer and DVM group as a general construction company have a great track record of building efficient properties of top technical quality. When compared to these, there is only a very minor difference, a couple of percentages, in the initial investment for a certified green building.

How important is a green building when it comes to attracting customers?

Customers have become very conscious of their choices, whether it is a customer product or an office building. Companies do prefer cost− efficient solutions, but that is just one side of the coin. Corporations have also realized the importance of retaining and attracting great people, and they want to make sure to offer them the healthy, welcoming work environment that further inspires work productivity and ultimately contributes to the bottom line. A green building can enable and facilitate all of these.

Do many tenants mention a preference for a green building as a reason for moving in?

Do you think that your building is filling up faster than typical Budapest office space? If so, why?

Eiffel Palace was leased and divested with record pace. We contribute this success to the aesthetic and technical quality, as well as the unique green features of the building.

Why is your building the best place to locate an office in Budapest?

Eiffel Palace represents a premium quality of its own, unparalleled to any other commercial development in Hungary. It is ideally located in the central business district of Budapest, in a highly visible and easily accessible setting. The 14,500 sqm historic downtown property houses prime offices on eight floors and accommodates 244 cars in the five−story underground parking garage.

The building’s unique architectural concept interlaces 19th century charm with contemporary design and sustainable technical solutions, making it a flagship project of Horizon Development that has already proven to attract both well− established premium international tenants and great services.

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EXPERT OPINION

Workplaces by Skanska A green strategy that goes beyond just checking the boxes.

“Green” is becoming one of the top priorities in today’s choice of new office accommodation, as corporate social responsibility gets ever higher up the corporate agenda.

Skanska has been at the forefront of the office development market in this aspect for many years in its Hungarian and worldwide operations.

We believe in developing a greener society and that by building green, we do not just provide a service to our customers, but equally as much to our environment as well.

Buildings generate more than 40% of the CO2 emission during their operation; green building is, therefore, a strategic step towards sustainability. We harness technologies that make our buildings more resource-efficient, more comfortable, healthier and better equipped, while also controlling the risks of rising energy costs.

Green thinking is at the core of our business; nevertheless, what makes our buildings truly unique is the holistic concept of how we serve our clients when accommodating their office requirements.

The so-called “Workplaces by Skanska” concept is based on three additional pillars besides green features: the cost-efficient operation of our tenants; the quality of the indoor environment we offer; and the way we shape the immediate surroundings of our buildings are all equally important in

order to build a successful, sustainable and leasable project.

The concept supports our belief that a workplace is much more than just an office.

It’s the heart of our tenants’ business and a place where their employees spend a lot of their time – often more than they do at home. That’s why the only way for us to go forward is to create high-quality and creative workplaces where our tenants’ staff and business can thrive. This can only be achieved with thorough knowledge of their needs and preferences, which enables us to create modern and innovative workplaces for them. In addition to our lengthy experience, a constant dialogue with our clients is therefore the key to success.

After Green House, our new project, Nordic Light will be the next example of the implementation of the “Workplaces by Skanska” concept. To be handed over in Q1 2016 (1st phase) and Q2 2016 (2nd phase), the LEED Gold pre-certified building will offer cool, green and healthy offices on a total of 26,000 sqm and will be a great addition to Budapest’s green building portfolio.

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Melinda Kovács Leasing Manager

www.skanska.hu

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More Budapest office developers going green ‘Green’ is more than a buzzword when it comes to offices in Budapest. The Budapest Business Journal investigates the value of a good environmental rating.

time minimizing or negating environmental harm. What is not always clear is what BREEAM or LEED accreditation means in practice. Most owners focus on the benefit of reduced operating costs for tenants and for many companies this issue is crucial, as even a small percentage of savings can increase returns. In reality, it is argued that the biggest gain for tenants is the improved productivity benefits of relocating to a certified building.

DAVID LAWRENCE

Skanska Property Hungary has sold the 17,800 sqm Greenhouse office center to the Hungarian open−ended property−based Torony Real Estate Investment Fund. The complex, completed in 2012, is fully leased and is the only LEED Platinum certified office building in Hungary according to Skanska.

This latest sale of a green office building is a reminder of the attraction of environmentally sound office space in Budapest.

The words “green” and “sustainability” are some of the most used buzzwords by developers and consultants when promoting an office complex. Promotional material also emphasizes that certification for a building has been awarded from for example BREEAM or LEED international green rating organizations. The argument from proponents of green practice is that green certification provides an economic benefit for office owners and tenants, while at the same

INCREASED BUILDING VALUE The most commonly used certification organizations are the U.S.−based LEED (Leadership in Energy & Environmental Design) and the European−based BREEAM (Building Research Establishment Environmental Assessment Methodology).

“Certification is awarded based on best− practice in design and such things as minimizing carbon emissions and energy and water usage,” says LEED. Michael Smithing, Director of Green Building Advisory at Colliers International, argues that green building certification increases building value primarily for the following reasons: 1. Improved Performance: Green buildings have lower utility costs, lower maintenance costs and lower capital expenditure costs. In addition, green buildings deliver an improved indoor environment that has been shown to increase occupant productivity by up to 5%.

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SWISS BUSINESS DAY 2014 I N N O VAT I O N

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C R E AT I V I T Y

23rd of SEPTEMBER 2014. - SYMA CONGRESS CENTER The event, this year held for the third time is the meeting point for Swiss and Swiss-interested companies and businessmen – a platform that serves as an excellent opportunity to build business relationships and get a line in the topic.

t The motto of the 3rd Swiss Business Day is Innovation and Creativity, in which terms you can get to know the exhibiting companies’ newest developments and innovative products; t The interested visitors can meet the Swiss companies present in Hungary – large and small as well: for example Neslé Hungária Kft., ABB Kft., Roche Magyarország Kft., Stadler Trains Magyarország Kft., Phoenix Mecano Kft., Emil Frey, Eisberg Hungary Kft. will also be present alongside with Swiss-linked SMEs, just as Swiss Selection Kft., GreenLab Kft., ABT Hungária Consulting Kft., Btech Magyarország and a lot of others; t The visitors can listen to presentations from Swiss and Hungarian governmental-level presenters in the topic of the Swiss-Hungarian economic relations and innovative projects, as well as Supporting export activities in Hungary; t You can get to know the Swiss success stories achieved in Hungary and the “best practices”; t On the thematic forums you can also hear about the domestic adaptation and application of the dual training, the experiences of higher education institutions and companies, t As well as the questions on Swiss taxation and law, the Swiss investment environment, where you can ask your questions from experienced legal experts.

Along with the broad professional programmes, we are waiting our guests with Swiss-related cultural and gastronomic treats and tombola! The event is free for visitors, but registration is needed.

Registration: info@swisscham.hu | Further information: www.swisscham.hu Organizers:

Rendezvény és Kongresszusi Központ

Sponsors:

Media partners:

Skanska’s Greenhouse.

2. Quality Control: The quality of a certified green building’s construction or operation has been controlled by an impartial third party (and generally by an outside consultant such as Colliers as well).

3. Image: Green buildings generally have a better image and are more attractive to tenants seeking modern, corporate compliant office space.

Steven Borncamp, founder of the Romania Green Building Council argues that zero energy buildings are possible in CEE. He uses the example of the close to zero energy 5,000 sqm Bullitt Building in Seattle. In general the logic is that the more a building conforms to green and sustainable features the quicker the building will let and provide the developer with an exit strategy, through a sale to an

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In its completed state, AFI Park will consist of five Class A office buildings in a 65,000sqm Bucharest office park. For all of its first three office buildings and for AFI Palace Ploiesti, AFI Europe is targeting LEED Gold certification. Green certification of AFI Park 1 is regarded as an essential milestone for the real estate market for two reasons: Firstly this is the first office building in Romania to obtain such a high credential under the LEED Core & Shell rating system, and secondly the building was designed and built in a sustainable manner from the drawing stage.

In general Hungary is regarded as being behind Germany in terms of sustainability.

“Typical recycling rates at office properties in Hungary are in the range of 15−20%.

In Germany the rate is closer to 90%. The instinct to act sustainably starts at home, not in the workplace, and so the progress Hungary has made in recycling is really very important – we are well ahead of other countries in the region such as Poland and in the long−term this will pay off. Just because we are behind today does not mean that we can not – and will not – catch up very rapidly,” concludes Smithing.

Budapest Business Journal | September 19 – October 02, 2014

investor. Therefore a green designed building satisfies both commercial and environmental concerns at the same time.

Another Budapest delivery at the beginning of the year was the 12,000 sqm Eiffel Palace office development by the Hungarian developer Horizon Development, located in the central fifth district of Budapest.

The project is basically a new building that has been constructed onto the original 1890s facades. Horizon achieved a 9,000 sqm pre−let and has subsequently sold the landmark classic building onto investors for €45 million. The center achieved both LEED and BREEAM accreditation. According to Horizon the complex has a highly efficient glass facade, 75% interior access to daylight, 90% of the space has city views and energy saving features, there are 33% reduced water costs and 12% of the building was constructed with recycled materials.

Skanska is next set to commence construction on the first phase of the 26,000 sqm Nordic Light project, also in Budapest.

The complex has been LEED Gold pre− certified and includes the provision of bike storage with showers, electric car parking facilities, water efficient energy and solar collecting for hot water; obviously Skanska’s aim of is to fully pre−lease and create an exit strategy with a sale to investors.

According to Colliers, 50% of Class A office buildings in Hungary will be green accredited by 2015. “While there is a growing tendency to certify retail and warehouse properties, we will have to wait a while to reach 50% in those sectors. Similarly, penetration into the lower classes of office space is well behind the Class

A market which is still dominated by foreign multinationals,” says the company. In Poland, some 100 office centers are BREEAM accredited and another 30 are LEED accredited. This compares to 48 BREEAM accredited retail centers and one LEED accredited shopping center in addition to ten BREEAM and two LEED certified industrial complexes.

LEARNING CURVE FOR BANKS “Green accreditation is more important for investors than lenders – the banks still don’t appear to understand how this impacts building perception and value. All investors now ask whether a building is certified during the first meeting – again they can still purchase buildings that are not certified, but getting credit committee approval is easier if the box is checked. In most cases the due diligence report will need to address the issue of certification if the building has not been certified,” comments Smithing.

In Romania the 12,250 sqm AFI Park 1, the first of five office buildings developed

by AFI Europe in a Bucharest business park, has achieved LEED Gold certification; the first such certification obtained by an office building in Romania according to AFI Europe. “Certification for our first office building in AFI Park shows our continuous commitment to develop projects with the highest level of technical specifications in our tenants’ interest. Going green is our objective and we are always taking it into consideration when starting the process of developing any new building,” explains David Hay, CEO of AFI Europe Romania.

The Eiffel Palace.

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Budapest Business Journal | September 19 – October 02, 2014

Hungary tilts against windmills Enthusiasm for wind power is breezing around the globe, but the trend seems to have bypassed Hungary. A 2006 law, and a lack of desire from the government, have frozen devlopment of this sustainable power source.

LEVENTE HÖRÖMPÖLI-TÓTH

A massive appetite for wind power is a global phenomenon. According to a recent Global Wind Energy Council (GWEC) report, from 1996 to 2013 annual installed capacity grew at an average rate of more than 20 percent. What is more, global wind power capacity is projected to nearly double in five years. The EU is no exception from that dynamism as capacity there soared in twenty four out of twenty eight member states from 2012 to 2013. Denmark already produces a third of its energy by wind, and hopes to get 60% of the country’s power from windmills.

Hungary is among the few EU countries that did not see an increase in wind−power capacity. The scapegoat is legislation from 2006 that maximized output at 330 MW. Industry experts claim that without the restriction around one and a half times more capacity could be up and running by now.

One major obstacle may be the way the EU handles subsidies. A change in the rules to improve a competitive environment could encourage Hungary to approve support windmill development after 2016. At the moment, the Hungarian government is also raising concerns about the dependability of power pulled out of the air.

The government argues that the power network cannot afford more energy generated by wind power plants; as it is not a constant energy source, there are wide fluctuations in terms of generation.

That characteristic requires flexible and substantial reserve capacity to serve as

Wind power in the world (2013) COUNTRY

INSTALLED CAPACITY (MW)

WIND SHARE OF TOTAL POWERGENERATION

Denmark

4,8K

33.8%

Portugal

4,8K

24.6%

Spain

23.0K

20.9%

Ireland

2.0K

17.3%

Germany

34.3K

7.9%

UK

10.5K

7.7%

China

91.4K

6.0%

US

61.1K

4.1%

EU average

4.18K

8%

Hungary

0.33K

1.7%

Source: Earth Policy Institute, European Wind Energy Association

counterbalance. “The problem could be addressed by granting licenses that would be spread more regionally. The northwest is overrepresented and that puts an unbalanced burden on the network,” notes László Tóth, chairman of the Hungarian Scientific Association for Wind Power.

“The majority of domestic power plants are so−called basic ones which means they cannot be switched on or off in a flexible manner,” explains a statement from the Hungarian Energy Office (MEH). “Such blocks are found only in three plants driven by gas turbines, but they must be saved for an emergency where the nuclear power plant at Paks stalls. On the other hand, a power plant counterbalancing wind power fluctuations would cost HUF 160 billion.”

GRAVITATING TOWARDS DEPENDENCY Lilla Csanaky, project manager at Climate Policy Institute Energiaklub tells the Budapest Business Journal that, “Paks lacks flexibility in terms of operation and wind power is not easily adjustable either.

That is why it is harder to incorporate the latter in the energy policy scheme, especially now that the official stance is to go nuclear further and significantly increase the capacity of Paks.”

It is not only environmentalists who have questioned how much sense it

makes to pour billions into nuclear energy whilst others work on eliminating it. Another twist to the story is that the Paks investment will take place utilizing Russian loans. To some ears, for a country that already is among the most dependent in Europe on Russian energy supplies, namely natural gas, to decided to deepen Russian dependency rather than make more commitment towards clean energy sources sounds far from rational.

TARGET NOT QUITE LOCKED Wind power would be an easy way for Hungary to meet the EU target that 14.65% of each member state’s energy generation should stem from renewables by 2020. In the National Action Plan a total installed capacity of 750 MW is envisaged for wind energy. In 2010 a call for proposals for new licenses was published, but withdrawn under the argument that the government feared competition could not be ensured.

Municipalities are among the biggest fans of wind power plants. “The credit rating of municipalities is improved by the revenues from local business tax which strengthens their eligibility to receive funds. HUF 2 bln was paid by the wind industry from 2009 to 2013 as a result of which investments worth HUF 10 bln could be executed,” a representative of the Hungarian Wind Energy Industrial Association, MSZIT, said in a forum.

Blown away: Windmill development is at a standstill in Hungary.

EU TO THE RESCUE Another obstacle to boosting wind capacity is rooted in the subsidy scheme. In an effort to help renewables gain competitiveness, such energy is bought by the state’s power network at a guaranteed price. Installing significantly more wind power plants would allegedly make that subsidy scheme crash.

According to a report by MEH, windpower subsidies in Hungary went up from HUF 2.3 bln in 2009 to HUF 12.7 bln by 2012. On the other hand, wind ate up as much as 44.5% of all subsidies meant for renewable energy producers.

Help may come from the European Union, which plans to gradually scrap the scheme based on compulsory purchases by the state. From 2016 onwards, new entrants on the renewable market will have to sell their energy in a competitive environment and will receive a price premium only to reach the market price level. That matches projections of the European Wind Energy Association, which believes that ideally wind energy should be competitive with conventional technologies on a market basis by 2020.

In the meantime, investors in wind technologies are said to be waiting for the green light in Hungary; it had better come soon before the money men run out of patience.

Local firm sees growth in solar panels

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Hungarian−owned Jüllich Glas, a glass making company with a large solar−panel division, says it is seeing phenomenal growth in demand for solar panels, around the world, and also right here in Hungary.

In a statement released September 16, the firm said that it is expecting its production to quadruple as a result of growing global demand for solar panels, one of its key products.

Founded in 1984 and located in Székesfehérvár (60 km south of Budapest), Jüllich Glas got into the solar business with Jüllich Glas Solar about five years ago, and produces panels made of silicon crystals, that can turn sunlight into electrical power.

Despite the arrival of Chinese solar panels on the European market, European producers remain competitive and deliver high quality panels, said

Donát Warvasovszky, head of Jüllich Glas’ solar branch.

The company has invested HUF 800 million in a R&D project and is now using solar cells that are integrated into glass.

The firm said that it produces about 25,000 solar panels daily and employs 40 people in that area. According to a statement, its annual revenue has reached HUF 1.2 billion.

Jüllich Glas Solar currently concentrates on household−sized mini plants, a type of product that the company says has become very popular.

Demand will stay high in that area because current regulations are favorable for such decentralized energy production, the firm said.

In addition to providing green power, the firm said it also takes part in educational programs.

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Budapest Business Journal | September 19 – October 02, 2014

Communities grow together with urban gardens The sharing economy takes a very undigital turn in urban gardens.

Besides building community, these spaces help solve the problem of unused plots in the city.

ZSÓFIA VÉGH

The sharing economy is growing fast. The much−loved business model of the 21st century has so much power that it took only a year or two to reshape some classic markets – just think of what Airbnb has done with accommodation services since its launch in 2008.

Although its most powerful tool is probably the Internet and some smartly designed apps, the sharing economy is not confined to the online space only.

Take urban gardening, which requires merely a few hands and a small plot to capitalize on community. “If used correctly, a 10 sqm plot can feed a family with basic vegetables for a year,” says Attila Ughy, mayor of Budapest’s District 18 and commissioner of the capital’s urban development and urban image protection committee. Ughy recently opened the district’s first urban garden, consisting of 35 10 sqm plots. Only one month in operation, Kertelő is very popular, so much so that the district is planning another one at Havanna lakótelep, one of the city’s more impoverished housing estates.

Beyond being an excellent community builder, urban gardening has a much more practical aspect. “Being an architectural platform, our primary aim/ initial idea of creating gardens in the city was to utilize unused land,” Mónika Kertész, curator and head of urban gardening projects at the Hungarian Contemporary Architecture Center (KÉK) told the Budapest Business Journal.

Urban gardens gained ground during the recession when several planned building developments were halted. It was right before the second phase of the double−dip that KÉK embarked on its first project. “This kind of urban development is a great example of temporary land use and urban development,” Kertész noted.

With urban gardening having no roots at all in Hungary, the organization spent the first two years building the basics.

It dug up information from outside the country, created the know−how and legal framework to allow gardening.

Often municipalities would cite the lack of certain laws, or parts of laws, that would allow them to establish a garden.

Communication could still be better; there is, for example, no overall database of urban gardens in use or in the offing in Hungary.

The upside for city−dwellers is that they get to enjoy the benefits of village life and grow their own crops without the burden of a big farm and everything that comes with that, says Ughy. Gardeners of the recently opened Kertelő are charged HUF 1,000 per month, yet even cultivating a 10 sqm land costs a lot more. People are under the impression that the acquisition of land is the most difficult part, but that usually runs smoothly. Local governments and especially property developers are happy to let out plots currently not in use as, this means they don’t have to deal with the maintenance, or finance facility management and

Going green in District 18: The Kertelő garden.

security. Kick−starting the cultivation of a small garden can cost millions, what with the top soil, garden utensils, plus the teaching and supervision. How much of that expense is borne by the gardeners is dependent of the project: KÉK usually bears the costs of all the above with the help of sponsors.

There may be only a handful of urban gardens in the capital (and some

more in cities elsewhere), but some big corporate players have already entered the arena. Hungarian Telekom was among the first to start Lecsóskert at Millenáris, and since then has opened another on its own premises. Aside from utilizing some green plots next to their technical facilities, community gardening fits its “life is for sharing” slogan pretty well.

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Conference at Kempinski covers the cloud As more and more products are connected to the internet, the cloud is becoming a more important intermediary between ourselves and our things. An open conference, set for Tuesday, September 23, in Budapest’s Kempinski Hotel Corvinus, will explore the growing importance of the cloud.

“Behind every product, every app and every device there is a customer. Customer relationship management has never been more important than it is today. Welcome to the Internet of Customers—where every company can connect every app, employee, partner, product and device with its customers, using the power of social, mobile – and the cloud,” says Géza Mátrai, Central European Sales Leader at Salesforce.com. He added that there will be billions of connected things, from smartphones and wearable smart devices to jet engines and cars.

The world is already becoming completely connected, according to the conference organizers, who note that millions of new products, apps and devices are connecting to the internet daily. “The cloud

is everywhere around us, even if we are not always aware of it,” a statement from the organizers said.

The Conference, called EuroCloud Day 2014 is opened for everyone. It is designed to explain the advantages of cloud services to total novices as well as people who are aware of the topic. Those who would like to attend this official event, and hear from experts like Mátrai and many others, should join the conference!

For further information, contact: email: conference@eurocloud.hu website: http://eurocloud.hu/ eurocloud-day-2014-2/

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Budapest Business Journal | September 19 – October 02, 2014

REC: Greening business for nearly 25 years The international center based in Szentendre is a hub for projects that mix profitability with environmental sustainability.

BBJ STAFF

Just north of Budapest, in the quaint former artists’ colony and tourist magnet of Szentendre, a large international organization has been quietly working for the region’s environment, and assisting businesses, for 24 years.

Those who are not in the field may not be familiar with the Regional Environmental Center for Central and Eastern Europe (REC), established by George Bush the elder right after the Wall fell. Around 200 staff members, based in the Szentendre headquarters and country offices around the region, work on a variety of projects, including promotion of green innovations that can make businesses not only more environmentally friendly, but also more economical.

“REC continuously seeks to work closely with its stakeholders – including the business community – to maximize the benefits of sustainable development ADVERTISEMENT

across the region and beyond,” says Jerome Simpson, head of information for the organization. “REC remains committed to environmental protection and firmly believes low carbon solutions drive growth. As our experiences show, they create markets, launch professions and result in new jobs.” He also noted that cleaner businesses are often the most efficient, and therefore cost−effective.

ENCOURAGING INNOVATION Of the 200 or so business−oriented projects underway at the REC, Simpson highlighted the organization’s cooperation with KIC InnoEnergy as one of the more interesting initiatives when it comes to supporting innovation among environmental businesses. Firms undertaking innovation in the environmental field are encouraged to apply to the REC. If they pass screening requirements in areas such as technological readiness, and show a reasonable chance of going to market within five years, they will be referred to the KIC team, Simpson said. Suitable firms will be eligible for funding with an eye toward achieving real commercial success.

“Research organizations are potential beneficiaries of our services toward small− and medium−sized enterprises in the field of sustainable energy technology development and exploitation,” Simpson said. “Young would−be researchers are

also of great interest to us, particularly if they are looking to studying a Master of Science degree in energy production, storage and supply, clean coal, nuclear, renewables, smart cities or smart energy supply. The KIC InnoEnergy Master School is open for applications from the start of 2015, and REC assists students in submitting their applications not just in Hungary but in 20 countries across Central and Eastern Europe.” As a part of this project, he said, the REC is compiling an inventory of investors in ten EU new member states who are ready to facilitate commercialization of new energy technology ideas.

A MOBILITY PLAN Another scheme being undertaken by the center is designed to cut the environmental footprint of the organization’s commuters.

“The aim is to assist staff to get to work via

Jerome Simpson. At left is the REC.

sustainable means of transport, but also to explore how we can improve the financial sustainability of the organization, for instance, by renting out our own vehicle fleet to staff,” Simpson said. He noted that the plan has already drawn the interest of the EuCham’s GREEWNWILL initiative.

(See page 23.)

In the area of cleaning up it’s own shop, the REC has also turned its own lush, riverside campus in Szentendre into a model of sustainability, complete with a solar roof and other green amenities.

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Budapest Business Journal | September 19 – October 02, 2014

Where there’s a will, businesses go green GREENWILL, an initiative that began in Budapest, is now in 54 countries. We asked the head of the program to tell us more about it.

GREENWILL radically reduces ‘barriers to entry’ for those organizations wanting to ... improve their approach towards sustainability.

BBJ STAFF

The GREENWILL initiative is a worldwide movement that started right here in Budapest. Founded in 2012 by the local EuCham, the European Chamber for CEE, the movement encourages companies to pledge more environmentally friendly behavior – and then back up that pledge with real action that customers can monitor and appreciate. We spoke to GREENWILL Program Director Scott Abrams about how the effort works, and how well it has been working.

Q

Who funds the GREENWILL initiative?

A: GREENWILL was launched and is presently funded by EuCham – European Chamber. Over time we will seek support from other sources in order to become sustainable and to augment GREENWILL’s impact around the world.

Q

How many countries are involved? When did Hungary join, and why is it so well represented?

A: In its first year of earnest operations, businesses and organizations from 54 countries joined GREENWILL. Indeed, there are a fair number of Hungarian registrants – despite the fact that concern for the environment is somewhat less pronounced here than in other parts of Europe. Being based out of Hungary means our visibility here is higher than elsewhere. For instance, after I spoke at an EU environmental conference in Budapest this summer a number of the participants registered for GREENWILL. We hold monthly “Green Socials” in Budapest (and elsewhere) where hundreds of people who are interested in sustainability get to connect, have a few drinks and learn more about us. The more registrants we have the bigger the environmental impact we can have.

Q Q

How many companies from Hungary are involved?

A: Presently it’s in the low 300s.

Compared to ISO, BREEAM and other certification programs, the GREENWILL certification seems relatively loose. Is it pretty easy for a company to join? Is that the point?

A: You said it! We avidly encourage any organization that can do so to join such certification programs. However, we realize that only a small percentage of companies can afford (financially and time−wise) to subscribe to regimes like ISO. GREENWILL radically reduces “barriers to entry” for those organizations wanting to take concrete, and perhaps

Scott Abrams.

initial, steps to improve their approach towards sustainability, but have limited means at their disposal.

Q

Because some other certifications are more formal, and can be audited, they provide an official certification that can give a business real value.

Does GREENWILL have the same value? Can a business try to improve its image, and claim it is meeting corporate social responsibility targets by taking a GREENWILL pledge?

A: Here’s where it gets interesting. A condition for joining GREENWILL is that the partner makes its commitment public. They appoint a Green Officer who signs the Green Policy. The Policy should be publicly viewable (storefront, website, etc.) Soon we’ll be distributing storefront stickers for registrants to display signifying that they’re GREENWILL members. All of these are top−down approaches.

But the big innovation is still in the pipeline. Next month we’ll be launching a KickStarter campaign to start building “GreenAdvisor” — a web and mobile platform to empower consumers to locate, review and rate any type of entity (business, school, city, park, etc.) around the world based on their perceived “greenness”.

This bottom−up tool is intended to revolutionize the way in which consumers can pressure businesses and organizations to be more eco−friendly.

Q

Do you promote the program to consumers, to try to get them to patronize GREENWILL partners?

A: Yes. We congratulate new members via our social media pages and soon we’ll be distributing to them the storefront stickers I previously mentioned. The reason we publicize our members is because once a member’s commitment is made public, its clients, employees, and partners can hold it more accountable for its subsequent actions.

Also, we only hold GREENWILL events, such as the monthly Green Socials, at venues that have registered for GREENWILL or have an equally suitable environmental policy. Some of

our members also have taken it upon themselves to encourage many of their partners to join GREENWILL as well.

Q

What incentives does a business in Hungary have for taking the pledge?

A: A simple, voluntary pathway to becoming greener, reducing costs, and attracting clients who care about the environment.

Q

Is there anything else you’d like to add?

A: If your readers want to take a minute to register for GREENWILL, we’ll be happy to help them become more sustainable (and save some money, too!).

Q

Do your partners tell of benefits of taking the GREENWILL pledge? What do they say?

A: Absolutely. Many people fear that “going green” could be costly and time consuming. The feedback we’re getting is exactly the opposite.

For instance, this week a business owner in Budapest thanked GREENWILL for inspiring him to switch to LED lighting, which dramatically reduced his energy bills. We hear much the same from our partners in Asia, where GREENWILL is seeing its most rapid growth.

People are curious about the environment and keen to optimize their operations. We try our best to assist them to do that.

PROFESSIONALS MEET AT GREEN SOCIAL Budapest’s sixth Green Social, set for 8pm on on October 16, will bring together an international group of environmentally minded business people, experts and activists for an informal gathering.

The evening is put together by GREENWILL, an initiative of the EuCham − European Chamber for CEE, here in Budapest, but a spinoff of the event has already taken place in Ljubljana.

Past Budapest Green Socials have taken place in trendy restaurants and bars. The venue for this social is yet to be confirmed, but more information should be online well before the date. Check online here closer to the date: https://www.facebook.com/greenwill.org.

WWW.BBJ.HU

24 3

Budapest Business Journal | September 19 – October 02, 2014

Green Office Buildings

5,900 3–5

12 1,100 HUF

2008

–

–

–

–

–

–

–

BREEAM "very good"

30,041 52,158

11 700– 1400

1,861 3

16–20 4.20

1996

–

–

–

BREEAM GOOD

29,800 32,300

16 800

10,000 3

»

3.60

2006

–

–

–

–

28,659 30,446

8 1,910

1,381 3

12 3.83

2002

–

–

–

–

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OTHER

LOCAL RECYCLING

DAYLIGHT AND MOTION SENSORS

NATURAL VENTILLATION

ENERGY EFFICIENCY PROGRAM

INDEPENDENT ENERGY SUPPLY

OWN SEWAGE MANAGEMENT

PUBLIC TRANSPORTATION

BICYCLE STORAGE

SOLAR COLLECTORS

YEAR ESTABLISHED

CLASSIFICATION OF EXISTING BUILDING

MONTHLY RENTAL FEE IN 2014 (EURO/SQM) MONTHLY SERVICE CHARGE IN 2014 (EURO/SQM)

9 1,500

FINAL PHASE

CURRENT LEASABLE OFFICE SPACE (SQM) MINIMAL LEASE TERM (YEAR)

35,900 50,800

GREEN SERVICES

PLANNING PHASE

NO. OF LEVELS AVERAGE LEVEL SIZE (SQM)

COMPANY WEBSITE

STAGE OF GREEN CERTIFICATION RATING

NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

RANK

Ranked by net office space (sqm)

RESULT OF VALIDATION

REAL ESTATE AGENCY (AGENCIES) OR AGENT(S)

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

ADDRESS PHONE FAX EMAIL

Cushman & :DNHÀ HOG -RQHV /DQJ /D6DOOH

– CPI Property Group (100)

1138 Budapest, Dunavirág utca 2–6.

(1) 225-6600 (1) 225-6601 VDOHV KXQJDU\# cpipg.com

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» »

1117 Budapest, ,ULQ\L -y]VHI XWFD ² (1) 382-5100 (1) 382-5101 LQIR#DLJOLQFROQ KX

– (100)

1097 Budapest, .|Q\YHV .iOPiQ N|U~W (1) 473-1209 (1) 473-1210 L NHUHNHV# KRUL]RQGHYHORSPHQW KX

–

» »

1134 Budapest, 9iFL ~W ² (1) 473-1209 (1) 473-1210 L NHUHNHV# KRUL]RQGHYHORSPHQW KX

1083 Budapest, )XWy XWFD ² (1) 266-2181 (1) 688-5498 LQIR#IXWXUHDO KX

GATEWAY OFFICE PARK www.gatewaybc.hu, www.cpigroup.hu

1

BANK CENTER www.bankcenter.hu

2

DUNA TOWER OFFICE BUILDING www.dunatower.hu 3

4

5

SCIENCE PARK www.sciencepark.hu

NÉPLIGET CENTER ZZZ QHSOLJHW FHQWHU FRP

26,000

»

8 900

» »

» »

–

–

–

–

PROMENADE GARDENS www.promenadegardens.hu

7

CORVIN TOWERS ZZZ IXWXUHDO KX

–

–

Gray water XVH SKRWRYRO WDLF SDQHOV HOHFWULF DQG hybrid car

chargers, JUHHQ ZDOO DQG green roof, ZDWHU HIÀ FLHQW aerators

–

BREEAM in use Very Good

–

/((' *ROG

–

BREEAM Very Good + LEED *ROG

–

25,000

»

6 4,300

»

» »

22,000 25,000

7 1,500

1,400 5

13.75 4.194.27

2010

–

–

–

BREEAM

)XWXUHDO

(100) –

20,246 43,907

8 3,500

26,208 5

12.9513.5 3.30

–

–

–

–

–

–

SUH /((' *ROG

–

Skanska 0DJ\DURUV]iJ ,QJDWODQ .IW (100) –

1133 Budapest, 9iFL ~W ² (1) 382-9100 (1) 382-9129 OHDVLQJ#VNDQVND KX

20,050

» »

» »

» »

LEED registered project

CBRE, Cushman :DNHÀ HOG

7UL*UDQLW +ROGLQJ (26) Heitman Hepp IV (74)

1095 Budapest, /HFKQHU gG|Q IDVRU (20) 220-5641 – VFVLNRV#WULJUDQLW FRP

7 2,500

895 3

12.75 3.20

»

– IVG Funds (100)

1117 Budapest, *iERU 'pQHV XWFD (1) 382-7560 (1) 382-7570 RIÀ FH#LYJ HXURSH FRP

25,000

6

BREEAM in use

» » » registered project

–

–

–

–

NORDIC LIGHT www.skanska.hu 8

9

MILLENNIUM TOWER III ZZZ PLOOHQQLXPWRZHUV KX

INFOPARK BUILDING D 10 www.infopark.hu

»

18,526

»

2008

2007

–

–

–

–

–

–

–

–

» » »

–

–

/((' 6LOYHU

WWW.BBJ.HU

25

3

Budapest Business Journal | September 19 – October 02, 2014

20 3.90

2010

–

–

–

–

–

–

–

BREEAM

ConvergenCE

– Europa Fund II (100)

18,500

»

8 2,300

»

» »

2015

–

–

–

–

–

–

–

LEED

»

GRT Group (100) –

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIÀ FHJDUGHQ KX

18,480 38,519

9 2,500

15,604 5

12.50– 13.5 1,000 HUF

2014

–

–

–

–

–

–

–

([FHOOHQW

–

– HB Reavis Group (100)

1138 Budapest, 9iFL ~W (1) 238-0359 (1) 238-0360 LQIR#YDFLFRUQHU KX

CORVIN ONE 14

18,000 20,000

8 2,500

958 5

13.50 3.95

BREEAM Very Good

)XWXUHDO

(100) –

1083 Budapest, )XWy XWFD ² (1) 266-2181 (1) 688-5498 RIÀ FH#IXWXUHDO KX

MILLENNIUM TOWER II 15

17,800

» »

4,722

»

12.5013.75 3.95

» » »

LEED registered project

CBRE, Cushman :DNHÀ HOG

TriGranit 'HYHORSPHQW Corporation (26) Heitman European Property Partners IV (74)

1093 Budapest, /HFKQHU gG|Q IDVRU (1) 374-5696 (1) 374-5668 VFVLNRV#WULJUDQLW FRP

MILLENNIUM TOWER I

17,100

» »

2,762

12.50

»

»

» » »

LEED registered project

CBRE, Cushman :DNHÀ HOG

7UL*UDQLW +ROGLQJ (26) Heitman Hepp IV (74)

1095 Budapest, /HFKQHU gG|Q IDVRU – – VFVLNRV#WULJUDQLW FRP

»

7 1,900– 2800

884 5

11.90– 12.9 2.90

»

– %OXHKRXVH &DSL WDO

1117 Budapest, 1HXPDQQ -iQRV XWFD ( (1) 382-7560 (1) 382-7570 RIÀ FH#LYJ HXURSH FRP

16,800 17,800

8 2,430

380 5

12.9514.00 EUR 855 HUF

–

–

–

–

–

–

/((' 3ODWLQXP

–

7RURQ\ ,QJDWODQ %HIHNWHWpVL $ODS (100) –

1062 Budapest, $QGUiVV\ ~W (1) 888-4120 – DODSNH]HOR# GLRIDDODSNH]HOR KX

16,159 27,000

8 2,200

845 5

12.50 960 HUF

2010

–

–

–

–

–

–

–

LEED

Robertson Hungary

GRT Group (100) –

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIÀ FHJDUGHQ KX

6+underground 2,429

– –

12–14 2.50

–

–

–

» » »

%5(($0 ([FHO OHQW

Cushman & :DNHÀ HOG

– ATENOR Group (100)

1138 Budapest, 9iFL ~W ~W ² (1) 785-5208 – LQIR#DWHQRU KX

8 2,100

1,880 5

11.50012.50 1,140 HUF

2008

–

–

–

–

–

» » »

»

Robertson Hungary

– Heitman (100)

1117 Budapest, $Ot] XWFD (1) 327-2050 (1) 327-2055 LQIR#RIÀ FHJDUGHQ KX

–

(100) –

1055 Budapest, %DMFV\ =VLOLQV]N\ ~W (1) 473-1209 (1) 473-1210 LQIR# KRUL]RQGHYHORSPHQW KX

OTHER

LOCAL RECYCLING

DAYLIGHT AND MOTION SENSORS

NATURAL VENTILLATION

ENERGY EFFICIENCY PROGRAM

INDEPENDENT ENERGY SUPPLY

OWN SEWAGE MANAGEMENT

PUBLIC TRANSPORTATION

BICYCLE STORAGE

SOLAR COLLECTORS

YEAR ESTABLISHED

CLASSIFICATION OF EXISTING BUILDING

MONTHLY RENTAL FEE IN 2014 (EURO/SQM) MONTHLY SERVICE CHARGE IN 2014 (EURO/SQM)

– 5

FINAL PHASE

CURRENT LEASABLE OFFICE SPACE (SQM) MINIMAL LEASE TERM (YEAR)

7 3,200

COMPANY WEBSITE

GREEN SERVICES

PLANNING PHASE

NO. OF LEVELS AVERAGE LEVEL SIZE (SQM)

18,500 23,700

RANK

NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

STAGE OF GREEN CERTIFICATION RATING

RESULT OF VALIDATION

REAL ESTATE AGENCY (AGENCIES) OR AGENT(S)

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

ADDRESS PHONE FAX EMAIL

1062 Budapest, 7HUp] N|U~W ² (1) 225-0912 (1) 375-0445 RIÀ FH#FRQYHUJHQ FH FRP

EIFFEL SQUARE ZZZ HLIIHOVTXDUH FRP 11

11

OFFICE GARDEN III

13

VÁCI CORNER OFFICES

ZZZ RIÀ FHJDUGHQ KX

ZZZ YDFLFRUQHURIÀ FHV KX

ZZZ IXWXUHDO KX

ZZZ PLOOHQQLXPFLW\ KX

16

ZZZ PLOOHQQLXPWRZHUV KX

INFOPARK BUILDING E 17

www.infopark.hu, www.ivg.hu

»

»

17,000

5

2008

–

2008

–

–

–

–

–

2006

–

–

–

–

–

–

–

–

–

–

–

/((' 6LOYHU

GREEN HOUSE ZZZ GLRIDDODSNH]HOR KX 18

19

OFFICE GARDEN II ZZZ RIÀ FHJDUGHQ KX

VÁCI GREENS 20

www.vacigreens.hu

21

OFFICE GARDEN I ZZZ RIÀ FHJDUGHQ KX

15,693

»

15,000 26,000

EIFFEL PALACE ZZZ HLIIHOSDODFH KX 14,500 32,000

22

K3 - ALLIANZ 23 OFFICE BUILDING ZZZ N LURGDKD] KX

14,350 30,000

8 1,600

8 2,300

4,000 5

» »

17–22 3.33

» »

2013

2010

–

–

–

»

Gray water use, SKRWRYROWDLF SDQHOV HOHFWULF DQG hybrid car – chargers, JUHHQ ZDOO DQG green roof, ZDWHU HIÀ FLHQW aerators

Rain water reuse

–

» » »

BREEAM Very Good + LEED *ROG

BREEM Very Good

»

– –

1087 Budapest, .|Q\YHV .iOPiQ N|U~W 48–52.

» » –

LAURUS OFFICES ZZZ ODXUXVRIÀ FHV KX

24

13,973 27,000

6–7 5501160

9,447 5

10–11 3.50

2011

–

–

–

–

–

–

BREEAM in Use, Very Good 2013

Robertson Hungary

. $ ,QJDWODQNH]HOŃ .IW » IR CEE Project 'HYHORSPHQW +ROGLQJ *PE+»

1103 Budapest, .ŃpU XWFD $ (1) 392-4075 (1) 392-4081 RIÀ FH#UREHUWVRQ KX

WWW.BBJ.HU

CLASSIFICATION OF EXISTING BUILDING

FINAL PHASE

PLANNING PHASE

OTHER

LOCAL RECYCLING

DAYLIGHT AND MOTION SENSORS

NATURAL VENTILLATION

ENERGY EFFICIENCY PROGRAM

12–15 3.50

INDEPENDENT ENERGY SUPPLY

300 3

OWN SEWAGE MANAGEMENT

6 2,700

PUBLIC TRANSPORTATION

12,680 27,000

BICYCLE STORAGE

13,200 3–5

SOLAR COLLECTORS

MONTHLY RENTAL FEE IN 2014 (EURO/SQM) MONTHLY SERVICE CHARGE IN 2014 (EURO/SQM)

8 1,600

STAGE OF GREEN CERTIFICATION RATING

GREEN SERVICES

YEAR ESTABLISHED

CURRENT LEASABLE OFFICE SPACE (SQM) MINIMAL LEASE TERM (YEAR)

13,200 20,400

13.50– 16 3.80

NO. OF LEVELS AVERAGE LEVEL SIZE (SQM)

COMPANY WEBSITE

Budapest Business Journal | September 19 – October 02, 2014

NET OFFICE SPACE (SQM) TOTAL GROSS BUILDING AREA (SQM)

RANK

26 3

RESULT OF VALIDATION

REAL ESTATE AGENCY (AGENCIES) OR AGENT(S)

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

ADDRESS PHONE FAX EMAIL

–

– CPI Property Group (100)

1138 Budapest, (V]WHUJRPL ~W ² (1) 225-6600 (1) 225-6601 VDOHV KXQJDU\# cpipg.com

–

(100) –

1118 Budapest, 5pWN|] XWFD (1) 309-0909 (1) 309-0900 LQIR#EXGDZHVW QHW 1096 Budapest, /HFKQHU gG|Q IDVRU fasor 9.

(20) 220-5641 – VFVLNRV#WULJUDQLW FRP

NEW AGE CENTER www.newagebc.hu, www.cpigroup.hu 25

BUDAWEST OFFICE 26 BUILDING www.budawest.net

K&H OFFICE BUILDING 27 BUILDING "H" ZZZ PLOOHQQLXPFLW\ KX

28

V48 www.v48.hu

12,370 23,000

9 1,300

11,500 13,500

5+underground 2,000

679 5

11,500 5

13 4

13.5014.5 3.75

–

2010

»

2006

–

–

–

–

–

–

–

–

–

–

–

»

–

–

–

–

,QWHUQDO park, 2.95 m height in RIÀFH VSDFH H[WHUQDO DQG LQWHUQDO shutters

11,330 25,000

9 1,900

12,063 5

» »

–

–

»

–

Dress rooms IRU F\FOHUV rain water FROOHFWLRQ IRU ZDWHULQJ VRODU FHOO JUD\ water network

10,600 22,000

8 1,800

2,562 5

»

3.33

2016

–

–

»

–

ZZZ IXWXUHDO KX

10,100 11,200

9 1,200

1,273 5

14.50 3.80

2014

–

–

RIVERPARK IRODÁK

9,865

»

8 400– 900

821 3

11.40– 12.75 2.70

–

–

–

–

–

–

–

33

8,700 9,450

11 920

8,300 3–5

9.90 1,266 HUF

VISION TOWERS SOUTH 34

8,050 8,660

8 1,200

2,400 5

14.50 3.80

7,531 9,091

8 1,000

– –

– –

–

–

7,170 10,900

6 1,400

2,180 5

» »

2002

5,390 5,691

6 900

3,100 3

10.50– 12 4

5,300 6,200

8 990

6,200 5

14.00 3.80

29

BUDAPALOTA

30

V17

31

VISION TOWERS NORTH

32

www.wing.hu

www.wing.hu

ww.riverpark.hu

–

–

–

–

BREEAM

Breeam-In-Use, very good

» » »

/((' *ROG

»

7UL*UiQLW +ROGLQJ (26) Heitman HEPP IV (74)

–

BREEAM Very Good

Codic, (1) 266-6000

– Codic InternaWLRQDO 6 $

1132 Budapest, 9iFL ~W ( ) (1) 266-6000 (1) 266-6002 LQIR KXQJDU\#FRGLF HX

BREEM Veryg Good

-RQHV /DQJ /D6DOOH

%XGD 3DORWD .IW (100) –

1122 Budapest, .ULV]WLQD N|U~W ² (1) 451-4280 (1) 451-4289 VDOHV#ZLQJ KX

Eston InternaWLRQDO -RQHV /DQJ /D6DOOH

9 .IW

–

1134 Budapest, 9iFL ~W (1) 451-4280 (1) 451-4289 VDOHV#ZLQJ KX

BREEAM Very Good

)XWXUHDO

(100) –

1134 Budapest, $QJ\DOI|OGL ~W (1) 266-2181 (1) 688-5498 RIÀFH#IXWXUHDO KX

»

»

– IVG Funds (100)

1096 Budapest, .|]UDNWiU ~W ² (1) 382-7560 (1) 382-7570 RIÀFH#LYJ HXURSH FRP

–

BREEAM "very good"

Cushman & :DNHÀHOG -RQHV /DQJ /D6DOOH

– CPI Property Group (100)

1139 Budapest, 9iFL ~W (1) 225-6600 (1) 225-6601 VDOHV KXQJDU\# cpipg.com

–

BREEAM ([FHOOHQW

)XWXUHDO

(100) –

1134 Budapest, $QJ\DOI|OGL ~W (1) 266-2181 (1) 688-5498 RIÀFH#IXWXUHDO KX

»

–

– .LQQDUSV , )DON|SLQJ $% (100)

1133 Budapest, 9iFL ~W (1) 237-1251 (1) 237-1250 UHFHSFLR#NLQQDUSV KX

Robertson Hungary

– &%5( *OREDO Investors (100)

1068 Budapest, 'y]VD *\|UJ\ ~W $ (1) 327-2050 (1) 327-2055 RIÀFH#UREHUWVRQ KX

–

» » »

BREEM Very

» » » *RRG ([FHOOHQW

–

–

» » »

BALANCE BUILDING www.cpigroup.hu, ZZZ EDODQFHEXLOGLQJ KX

ZZZ IXWXUHDO KX

KINNARPS HOUSE 35 ZZZ MDUO NRQIHUHQFLDNR]SRQW KX www.kinnarpshouse.hu

36

LIGET CENTER

37

THE QUADRUM

38

CORVIN CORNER

ZZZ OLJHWFHQWHU KX

www.quadrum.hu

ZZZ IXWXUHDO KX

–

2014

–

–

–

–

–

–

Training and conference KDOOV IRU UHQW

–

–

BREEAM in Use Very Good 2013

–

» » »

–

–

–

–

–

–

–

–

–

–

2008

–

–

–

–

–

–

–

BREEAM Very Good

$,* /LQFROQ .IW

» »

9HFVpV /LQFROQ ~W (1) 382-5100 (1) 382-5101 LQIR#DLJOLQFROQ KX

2014

–

–

–

–

BREEAM Very Good

)XWXUHDO

(100) –

1082 Budapest, )XWy XWFD ² (1) 266-2181 (1) 688-5498 RIÀFH#IXWXUHDO KX

BBJ

4 Socialite GET CULTURED Festival brings orgy of events

SOCIALITE

Book review: ‘Stress Test’ 29 SOCIALITE

Who’s News

30

28

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 19 – October 02, 2014

Café Budapest festival kicks off culture season The offbeat is in focus in this cavalcade of music, art and diverse live performance.

BBJ STAFF

Budapest’s culture comes alive in the fall: The summer festival season ends, the orchestras and opera and theater companies return home, and the museums and concert venues get busy. And every year around this time, one festival has helped to get the season going, with a multidisciplinary program that tends toward the unusual and offbeat but still offers something to please almost everyone.

Founded in the early ’90s, and originally called the Budapest Autumn Festival, the event was dubbed Café Budapest in 2011. This year, Café Budapest runs from October 3−19 and features more than 200 concerts, plays, circus performances, literary readings, films and exhibitions, showing at more than 50 venues.

In music, known international names – like Nina Hagen, Laurie Andersen and the Tiger Lillies – mix it up with lesser−known foreign visitors. Local musical acts range from folk performers Vodku to singer Szőke Nikoletta and her quartet doing jazz standards, to Hungary’s famous classical percussion band Amadinda and the modern violin virtuosity of Félix Lajkó. If you need something more offbeat, try an act that brings together free−jazz saxophonist István Grencsó with Dr. Béla Máriás, one of Hungary’s original punk musicians.

Nagymező utca will host the Budapest Photo Street Venue between the traditional photo museum of Mai Manó Ház (Nagymező 20) and the new Robert Capa Contemporary Art Center (Nagymező 8).

Outdoor shows on the street will give live performers an opportunity to interpret some of the photos.

Perhaps the best woman chess player ever, Hungarian Judit Polgár, will bring ADVERTISEMENT

the eighth International Aquaprofit− Polgár Chess Festival, an event aimed at children, to the Palace of Arts (MÜPA) on October 4, from 10 am.

On October 17−18, a weekend of contemporary galleries encourages broader interest in the smaller galleries that are mostly known to art enthusiasts only. More than a dozen galleries will participate with shows designed to entice.

For more information and a full program, check the website at: www.cafebudapestfest.hu

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 19 – October 02, 2014

29

BOOK REVIEW

DESIGN WEEK OCTOBER 3-12 Design Week, Budapest’s annual celebration of commercial creativity runs October 3−12 this year, adding to the buzz created by the Café Budapest Festival.

Fashion, industrial design and technological innovation from Hungary and abroad are celebrated in a series of events that focus on the visual, but also include exciting sounds – and flavors.

The program, which started as a week but has since expanded to 10 days just to fit everything in, is meant to help showcase Hungary’s highly talented but poorly marketed designers. It takes place in shops, design institutes and other venues all over town.

There’s plenty of fashion on display, with runway shows and opportunities to go behind the scenes and see fashion designers, and other creative types, at work.

This year’s special guest country is the Netherlands, and Jurgen Bey, the famous Dutch interior and furniture designer, will give a presentation at Budapest’s Moholy Nagy University of Art and Design.

For more information, see: www. designweek.hu/2014/EU 28 average in 2013, Eurostat data shows.

Stress Test From the former Treasury Secretary comes the definitive account of the unprecedented effort to save the U.S. economy from collapse in the wake of the worst global financial crisis since the Great Depression.

CARA CHAPMAN

On January 26, 2009, during the depths of the financial crisis and having just completed five years as President of the Federal Reserve Bank of New York, Timothy F. Geithner was sworn in as the 75th Secretary of the Treasury of the United States by President Barack Obama. Now, in a candid, riveting and historically illuminating memoir, Geithner takes readers behind the scenes during the darkest moments of the crisis. Swift, decisive and creative action was required to avert a second Great Depression, but policy makers faced a fog of uncertainty, with no good options and the risk of catastrophic outcomes.

“Stress Test: Reflections on Financial Crises” takes us inside the room, explaining in accessible and forthright terms the hard choices and politically unpalatable decisions that Geithner and others in the Obama administration made during the crisis and recovery.

Geithner discusses the most controversial moments of his tenures

at the Federal Reserve Bank of New York and at the Treasury, including the harrowing weekend Lehman Brothers went bankrupt; the searing crucible of the AIG bonuses controversy; the development of his widely criticized but ultimately successful plan in early 2009 to end the crisis; the bracing fight for the most sweeping financial reforms in 70 years; and the lingering aftershocks of the crisis, including high unemployment, the fiscal battles, and Europe’s repeated flirtations with the economic abyss.

Geithner also shares his personal and professional recollections of key players such as President Obama, Ben Bernanke, Hank Paulson and Larry Summers, among others, and examines the tensions between politics and policy that have come to dominate discussions of the U.S. economy. An insider’s account of how the Obama administration saved the economy but lost the American people, “Stress Test: Reflections on Financial Crises” reveals a side of Geithner that only a few have seen.

STRESS TEST: REFLECTIONS ON FINANCIAL CRISES

by Timothy Geithner Published by Random House Business Books ISBN 9781847941237 Available to order through www.hungaropress.hu

ADVERTISEMENT

NONONSENSE EXHIBITION

BANK CENTER AULA, 1054 BUDAPEST, SZABADSÁG SQUARE 7.

Dutch visuality is sincere, individualistic and expresses a pragmatic identity. It is practical, reserved and simple; moreover, it prefers ideas and debates to the aesthetic quality. It celebrates the unexpected, unusual combinations, and puts materials, techniques and results in a new context, while keeping its relaxed self-irony. The exhibition presents Hungarian creators who reflect this design attitude, through a broad selection of the visual culture, starting from photography through furniture design to body objects.

30

WWW.BBJ.HU

4 Socialite

Budapest Business Journal | September 19 – October 02, 2014

WHO'S NEWS Do you know someone on the move?

Send information to research@bbj.hu

Name ÁKOS BURJÁN Current company/ new position MEMBER OF THE CORPORATE TAX GROUP AT PWC HUNGARY

RALLY CELEBRATES HUNGARIAN WINE The 19th Road of Hungarian Wines Rally ran August 29−31, incorporating different wine regions in Hungary. Participants raced around the country, stopping in the evenings for social events, like games and tastings of wine and palinka – the Hungarian fruit brandy. Those who completed the full event traveled 600 kilometers and visited 60 checkpoints over the course of three days. Prizes were given out in several categories, and were presented by two honored guests, Minister of Interior Sándor Pintér and Minister of Agriculture Sándor Fazekas.

Name LÁSZLÓ DEÁK Current company/ new position LEADER OF THE INDIRECT TAX GROUP AT PWC HUNGARY

Ákos Burján, 36, is one of two new partners recently appointed at PwC Hungary. He is is a member of the corporate tax group. Burján is an economist who started his carrier as a tax advisor in 1999.

Later he obtained an LL.M. (Masters of International Tax Law) degree in Vienna and graduated from the Institute of Postgraduate Legal Studies at Eötvös Loránd University as an economist with a specialization in law. He joined the tax and legal department of PwC Hungary in 2003. He has spent several years working abroad: first in the Amsterdam office of PwC in 2004, and then he led PwC’s tax department in Slovenia for two and a half years. He has extensive experience in both local and international tax structuring, tax and accounting planning of mergers and acquisitions and due diligence.

His clients in the past and at present cover both large Hungarian and international companies, mainly from the pharmaceutical, energy, TICE and real estate sectors. He has been lecturing on taxation at the Budapest Business School for more than 10 years.

László Deák, 48, is the other new partner recently appointed at PwC Hungary. He is the leader of the indirect tax group. Deák joined the tax and legal department of PwC Hungary in 2000.

Before joining the firm, he worked for the customs authorities for 16 years. He is an economist who specializes in indirect taxes (VAT, customs and excise duties, environmental taxes, and energy tax). Deák is also known for his expertise in Hungarian sports subsidies. His major clients include Hungarian and international companies, municipalities and sports organizations. He is an active member of the Tax and Customs Committee of the Hungarian Association of International Companies. He is also a member of various working groups at the National Tax Authority.

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HUF 7.900 / person (+12% Service Charge) MORE INFORMATION & TABLE RESERVATION restaurantreservation@buddhabarhotel.hu Tel.: +36 1 799 7302 H-1052 Budapest · Váci utca 34. www.buddhabarhotel.hu Member of Mellow Mood Hotels

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Budapest Business Journal | September 19 – October 02, 2014

4 Socialite

31

Restaurants BORKONYHA FINE

Opening Winekitchen was the fulfilment of a more than a decade−long dream. Having left Restaurant Mágnáskert, we set off on different professional paths that led us to Bock Bistro and Bortársaság. But our friendship and family ties stayed strong over the years; therefore it was obvious that may opportunity come, we would open a restaurant together. Winekitchen, as we see it, is a blend of a French−style bistro and a contemporary family restaurant offering the best of Hungarian cuisine. The name Winekitchen speaks for itself. The concept is based on the wide and diverse wine list, the delicious food and the personal and relaxed service. Our wine assortment includes 200 different, mostly Hungarian wines that represent not only the wellknown wineries, but also small and yet−to−be−discovered cellars. We offer 48 wines by the glass at a time and have a temperature−controlled wine shelf with 1,200−bottle−capacity so that you can buy wine by the bottle at a reasonable price for either takeaway or drinking on spot.

Our cuisine is based on fresh, even daily purchased ingredients and on the weekly−

This is an extract from Fine Restaurants, the Budapest Business Journal’s Restaurant Guide 2014 (www.facebook.com/fine. restaurants). To order your copy of the publication, which costs HUF 2,990, send an email including contact details to Andrea Bognár, bognar.a@amedia.hu

fortnightly changing offers written on the blackboard. Our chef, Ákos Sárközi has been with us from the first moment. We appreciate his knowledge and genuineness, professionalism showed while working in Restaurant Alabárdos, his continuous success in the Tradition and Evolution competition, and the experiences he gained in the Portuguese two−Michelin− star Restaurant Villa Joya. “What is my philosophy? I would like to create a kitchen full of flavors. If I have to define my style, I would say that it is open to any influences.

As I get inspiration from the Transylvanian cuisine, I’m also ready to use Spanish, French or Italian ingredients. My aim is to show the many facets of the traditional Hungarian cuisine by using contemporary approach and kitchen technology.”

Borkonyha was rewarded with a Michelin Star in March 2014. The proof of the pudding is in the eating, so come and visit us and we hope that you will become a regular guest at Winekitchen, say owners Tamás Horváth and Zoltán Kalocsai.

Address of restaurant: 1051 Budapest, Sas utca 3. · Telephone number: +36 (1) 266−0835 · Telephone number for reservations: +36 (1) 266−0835 · E−mail address: borkonyha@t−online.hu · Website address: www.borkonyha.hu · Name of manager: Tamás Horváth, Zoltán Kalocsai · Name of chef: Ákos Sárközi · Opening hours: Monday−Sunday: 12:00–24:00 · Type of cousine: Hungarian and International · Number of seating places: 46+12 bar / summer terrace: 26 Year of establisment: 2010 ADVERTISEMENT

GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

1ST DISTRICT

3RD DISTRICT

5TH DISTRICT

8TH DISTRICT

11TH DISTRICT

15TH DISTRICT

35 SQM – 2 ROOMS, VÁRKERT QUARRY

74 SQM – 2 ROOMS + HALL, LAJOS STREET

93 SQM – 3 ROOMS + HALL, ST. ISTVÁN AVENUE

50 SQM – 2 ROOMS, REZSŐ SQUARE

95 SQM – 3 ROOMS, BARÁZDA STREET

63 SQM – 3 ROOMS, RÁKOSPALOTA

Next to recently renovated Várkert Bazaar, this high floor apartment with separate rooms and open kitchen is situated in a period building with elevator.

In the very heart of Óbuda, this completely renovated, spacious apartment with 2 balconies is situated in a well maintained building with elevator.

This very spacious and sunny, street facing apartment is situated in a nice period building with elevator, right in front of the Comedy Theatre (Vígszínház).

Nice view over the Rezső Square, this bright apartment in good condition with private gas heating is situated in a small condominium with well-kept common garden.

This top floor apartment has 89 sqm terrace, separate rooms, 2 bathrooms, 2 wardrobe rooms, parking space and it is situated in a new building.

In a quiet garden suburb area, in a new building, this garden facing, mansard apartment has 2 terraces and parking space.

14.900.000 HUF

19.900.000 HUF

25.800.000 HUF

14.850.000 HUF

46.900.000 HUF

+36.1.201.0403

1ST DISTRICT

+36.1.430.1403

3RD DISTRICT

+36.70.3156.087

5TH DISTRICT

+36.70.414.7126

8TH DISTRICT

+36.1.720.2433

20.990.000 HUF

12TH DISTRICT

+36.70.398.8754

15TH DISTRICT

48 SQM – 1 ROOM + HALL, ATTILA STREET

64 SQM – 3 ROOMS, NÁNÁSI STREET

162 SQM – 4 ROOMS + HALL, PETŐFI S. STREET

89 SQM – 4 ROOMS, BAROSS STREET

42 SQM – 2 ROOMS, NÁRCISZ STREET

95 SQM – 2 ROOMS, RÁKOSPALOTA

At the bottom of the Buda Castle, this renovated, quiet, garden facing apartment is situated in a Bauhaus style building.

In the Római Beach area, next to the Danube, this very quiet and bright apartment has 2 terraces and it is situated in a new building. Garage possibility for 2.700.000 HUF.

A few steps from the Ferenciek Square, this renovated, well divided, street facing apartment has balcony, 2 bathrooms and private gas heating.

This completely renovated, sunny, well divided, high floor apartment with balcony is situated in a nice period building with elevator.

In a quiet, green area, this very bright, garden facing apartment that needs renovation has balcony, separate rooms and private gas heating.

This completely renovated, well insulated family house has 370 sqm of lot, big front garden and it is located in a quiet street.

14.900.000 HUF

24.800.000 HUF

63.000.000 HUF

+36.1.201.0403

2ND DISTRICT

+36.1.430.1403

+36.70.457.4943

19.400.000 HUF

+36.70.414.7126

+36.1.789.2846

31.900.000 HUF

3RD DISTRICT

5TH DISTRICT

135 SQM – 5 ROOMS, SAN MARCO STREET

138 SQM – 4 ROOMS + HALL, GARIBALDI ST.

60 SQM – 3 ROOMS, NÉPLIGET

84 SQM – 4 ROOMS, BÖSZÖRMÉNYI STREET

122 SQM – 4 ROOMS, SASHALOM

This completely renovated, street and garden facing apartment with private gas heating and parking space in the common garden is located in a quiet, green area.

Beautiful panorama over the hills, this very well divided, quiet apartment has balcony and private gas heating and it is situated in a new built building.

Beautiful panorama over the Danube from the big balcony, this completely renovated, high floor apartment with separate rooms is located adjacent to the Parliament.

View over the Népliget Park, in a new subdivision, this very sunny apartment has 22 sqm terrace, separate rooms and air conditioning system. 2 parking spaces for 1.000.000 HUF.

This spacious and quiet apartment that needs renovation has separate rooms, garden facing balcony and private gas heating.

This spacious, well divided, two storey family house has 406 sqm of lot, 2 bathrooms, 13 sqm terrace, garage and it is located in a quiet side street.

22.900.000 HUF

39.900.000 HUF

105.000.000 HUF

20.900.000 HUF

2ND DISTRICT 72 SQM – 3 ROOMS, VÖLGY STREET

+36.70.328.8501

3RD DISTRICT 86 SQM – 3 ROOMS, NÁNÁSI STREET

+36.70.457.4943

6TH DISTRICT

+36.70.619.8733

10TH DISTRICT

12TH DISTRICT

+36.70.398.8754

53 SQM – 2 ROOMS, NAGYAJTAI STREET

+36.1.336.1706

10TH DISTRICT

14.900.000 HUF

21.500.000 HUF

+36.1.789.2846

13TH DISTRICT

150 SQM – 5 ROOMS, PETŐFIKERT

This two storey family house consists of 2 separate apartments with 1109 sqm of lot, 2 bathrooms, balcony, terrace and garage.

This new built, full furnished luxury apartment has balcony, air conditioning system, electric roller shutters and parking space in the courtyard and it is located in a quiet, green area.

In a new building with elevator, this very quiet and bright apartment with open kitchen is located close to the Árpád Bridge. Good connection to public transport.

37.900.000 HUF

43.100.000 HUF

17.900.000 HUF

22.100.000 HUF

19.800.000 HUF

4TH DISTRICT

16TH DISTRICT

58 SQM – 2 ROOMS, TEVE STREET

Adjacent to Andrássy Boulevard, this bright, well divided, street facing apartment benefits of a balcony and private gas heating is situated in a period building with elevator.

2ND DISTRICT

+36.70.337.2499

54 SQM – 2 ROOMS, HALAS STREET

In the Római Wellness Home I. subdivision, this exclusive apartment has 200 sqm private garden, big terrace and it is located next to the Danube. Garage for 3.000.000 HUF. +36.1.430.1403

27.900.000 HUF

84 SQM – 3 ROOMS, SZONDI STREET

This very spacious and bright apartment with balcony is situated in a small, new condominium with big, nice common garden. Parking lot belongs to the apartment. +36.1.376.6080

16TH DISTRICT

+36.70.322.3697

6TH DISTRICT

+36.70.619.8733

11TH DISTRICT

+36.70.414.7759

43.500.000 HUF

13TH DISTRICT

+36.70.337.2499

22ND DISTRICT

177 SQM – 5 ROOMS, ADY ENDRE STREET

44 SQM – 2 ROOMS, ST. ISTVÁN STREET

100 SQM – 3 ROOMS, BAJCSY-ZSILINSZKY ST.

50 SQM – 2 ROOMS, DIÓSZEGI STREET

73 SQM – 3 ROOMS + HALL, TÁTRA STREET

60 SQM – 3 ROOMS, GERINC STREET

This very sunny and spacious apartment that needs renovation has 2 separate entrances, 2 bathrooms, private gas heating and it is situated in a nice period building with elevator.

This very sunny mansard apartment with separate rooms, open kitchen and private gas heating is situated in a new building with elevator, in the centre of the district.

This very bright, high floor apartment benefits of private gas heating and it is situated within a nice period building meters away from the Opera and St. Stephen’s Basilica.

This very bright, completely renovated apartment has separate rooms and it is located in a renovated building, in a quiet side street, close to the Bottomless Lake.

A few steps from the Danube and the St. István Park, this sunny, high floor apartment has spacious separate rooms, balcony and it is situated in a Bauhaus style building.

Beautiful panorama over the Rózsavölgy from the closed terrace, this very bright apartment in good condition with garage is situated in a small condominium with nice common garden.

58.410.000 HUF

11.500.000 HUF

21.900.000 HUF

18.900.000 HUF

30.900.000 HUF

32.900.000 HUF

+36.1.336.1706

+36.1.782.7275

+36.70.3156.087

+36.1.784.1929

+36.70.414.7759

+36.1.720.2433

MEASURING IS NOT ENOUGH!

2ND DISTRICT

4TH DISTRICT

7TH DISTRICT

11TH DISTRICT

155 SQM – 4 ROOMS + HALL, HŰVÖSVÖLGYI ST.

51 SQM – 2 ROOMS, SZÉRŰSKERT STREET

88 SQM – 3 ROOMS, JÓSIKA STREET

78 SQM – 3 ROOMS, OKTÓBER 23. STREET

Beautiful panorama over the Buda Hills, this sunny and spacious top floor apartment with fireplace and big balcony is situated in a Bauhaus style building.

In the quiet garden suburb area of the district, this well insulated semi-detached house has 423 sqm of lot, nice front garden, outbuilding and garage.

This very spacious and quiet apartment with separate rooms and private gas heating is situated in a beautiful secession style building, a few steps from the Erzsébet Circuit.

Beautiful panorama over the Gellért Hill, this completely renovated, sunny, high floor apartment has balcony and parking space and it is located close to the Metro Line 4.

67.500.000. Ft

16.990.000 HUF

17.900.000 HUF

26.300.000 HUF

+36.1.376.6080

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+36.1.782.7275

+36.70.322.3697

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